Health Benefits After Retirement Information in this presentation is based on current law and is subject to change.
Eligibility for retiree participation in the State’s Health Benefits Program
If your Hire Date is prior to 7/1/2011 and your retirement directly follows your State service, you will be eligible for health benefits if: • you haveat least5 years of creditable service; OR • you areapproved for a State disability retirement.
If your Hire Date is prior to 7/1/2011 and your retirement does not directly follow your State service, you will be eligible forhealth benefits if: • you ended State service with at least16years of creditable service; OR • you ended State service with at least10 years of creditable service AND within five years of normal retirement age; OR • you are approved for a State disability retirement.
If your Hire Date is after 7/1/2011 and your retirement directly follows your State service, you will be eligible for health benefits if: • you haveat least 10 years of creditable service; OR • you areapproved for a State disability retirement.
If your Hire Date is after 7/1/2011 and your retirement does not directly follow your State service, you will be eligible forhealth benefits if: • you ended State service with at least25years of creditable service; OR • you ended State service with at least10 years of creditable service AND within five years of normal retirement age; OR • you are approved for a State disability retirement.
State Subsidy for retirees eligible to participate in the State’s Health Benefits Program
You will get the Maximum $tate $ubsidy if: you haveat least16years of creditable service if you were hired prior to 7/1/2011 or 25years of creditable service if were hired after 7/1/2011 OR • you areapproved for a State disability retirement
Your $tate $ubsidy will be Pro-Rated if: (Based on months of Creditable Service) • you have a service retirement with less than 16 years of creditable service if you were hired prior to 7/1/2011 or less than 25 years of creditable service if you were hired after 7/1/2011
Calculating Pro-Rated State Subsidy To find the percentage of maximum subsidy the State will pay, divide your months of creditable service* by 192 months (16 years) if hired prior to 7/1/2011 or 300 months (25 years) if hired after 7/1/2011 For example, 60 months (Five years)÷ 192 months (16 years) = .3125 ▫.3125 (31.25%) of the maximum subsidy; Retiree’s monthly cost: ▫.6875 (68.75%) of the maximum subsidy, PLUS ▫ the regular monthly retiree premium *Creditable service includes military and purchased service, and credit for unused sick leave.
For estimates of premiums withpro-rated State subsidy, call the Employee Benefits Division: • (410) 767-4775 OR • 1 (800) 30-STATE
Do Not be Alarmed!Your employee coverage will be terminated.(you won’t have premium deductions through Central Payroll)AND A COBRA letter will be mailed to your home.(even if you’re eligible for retiree coverage…required by federal law) To have health benefits upon retirement, a Retiree Health Benefits Enrollment Form must be submitted to the Employee Benefits Division Before completing the Enrollment Form, please review the current Benefits Guide
How to Enroll in Retiree Health Benefits Obtain a Benefits Guide and Retiree Health Benefits Enrollment Form from: ▪ Your Agency Benefits Coordinator (in your agency’s HR office); OR ▪Department of Budget & Management Website (www.dbm.maryland.gov, click on Health Benefits for State Employees); OR ▪ By contacting the Employee Benefits Division
When You Can Enroll, Change, or Cancel Coverage: During Open Enrollment: • Open Enrollment packets are mailed to your address on file with Employee Benefits; or Within 60 days of a Qualifying Event: • Change in Family Status:marriage, divorce, birth or death of dependent, child no longer eligible • Loss of Other Coverage:includes loss of employee coverage upon retirement • Moving Out of a Plan’s Service Area: (CareFirst BCBS-POS or United Concordia-DHMO) • Becoming eligible for Medicare:reaching age 65 or Social Security disability at any age
Completing the Retiree Enrollment Form • The Form must be completed, signed, and dated; • If you will be covering dependents not covered at the time of retirement, you must include the appropriate Dependent Verification Documentation (listed in the Benefits Guide); • The Enrollment Form (and any required documentation) must be received in the Employee Benefits Division with a postmark or fax date within 60 days of your retirement date. Otherwise, you will have to wait to enroll at a later date.
Eligible Dependents Dependent eligibility criteria for retirees is the same as for active employees.
Overview • On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law which applies to biological children, step-children and adopted children.
Dependent Child Eligibility Children who are dependents and meet the Program’s Dependent Child criteria can remain on the policy through the end of the month they reach age 26 for medical, prescription drug and dental benefits. Disabled children are eligible dependents if they have a permanent disability that began before reaching age 26; however: • the child must be a dependent and, other than age, meet dependent child eligibility criteria • a disability certification must be submitted to the Medical Plan (or to the Employee Benefits Division if not enrolled in a Medical Plan) every two years.
Young Adult Coverage • NOTE: PPACA provision does not apply to grandchildren and legal wards • Grandchildren and legal wards who are 25 years of age now are subject to post-tax deductions and imputed income (rate tables are located at www.dbm.maryland.gov website, click on Health Benefits for State Employees)
Same Sex Domestic Partners are Eligible Dependents However, you may be taxed on the Imputed Income Under the Federal Internal Revenue Code: • Domestic Partners are not automatically eligible for tax-preferred health benefits coverage. • If a Domestic Partner and/or the Domestic Partner’s children do not meet the IRS dependency qualifications for tax-preferred coverage, the State subsidy for the partner and/or partner’s children is considered as taxable income for the retiree. This is known as imputed income.
Plans Available to Retirees • Medical Plans • PPO: CareFirst, UnitedHealthcare • POS: Aetna, CareFirst, UnitedHealthcare • EPO: Aetna, CareFirst, UnitedHealthcare • Prescription Plan: Express Scripts, Inc. • Dental Plans: United Concordia DPPO or DHMO • Term Life Insurance – If enrolled at the time of retirement, you can continue or decrease coverage; you may not increase or add coverage upon or after retirement • Long Term Care – Complete a conversion form within 90 days of your last day of employment to continue same coverage; payments are made directly to The Prudential Insurance Company of America
Term Life Insurance Both the Retiree and the Dependent life insurance policies are reduced, based on the retiree’s birth date as follows: • 65% of original coverage the month retiree reaches age 65 • 45% of original coverage the month retiree reaches age 70 • 30% of original coverage the month retiree reaches age 75 • 20% of original coverage the month retiree reaches age 80 • Premium is based on new age bracket and policy amount • Up to the full “lost” amount of coverage can be converted to an individual whole life policy by contacting MetLife within 31 days of the reduction.
Plans Not Available to Retirees • Flexible Spending Accounts (Health Care andDependent Care) • According to federal regulations, the plan will only reimburse eligible expenses incurred while still an active employee • Accidental Death & Dismemberment Plan • You can convert to a private policy with the AD&D carrier within 30 days of ending employment • Term Life Insurance • If not enrolled with no break between employee and retiree coverage
If You Change Your Address Submit your address change in writing to the Employee Benefits Division with a • Personal Information Change Form; or • Letter with your name, old address, new address, phone number, signature and date. *Under the current contract, if you elected CareFirst BCBS-POS (out of network benefit only outside the Maryland Service Area) or the United Concordia DHMO plan and move outside of Maryland Service Area, you must elect another plan as this plan is not available nationwide. Also notify the State Retirement Agency.
Plans with a National Provider Network Medical Plans: Aetna POS and EPO CareFirst PPO, POS* and EPO UnitedHealthcare PPO, POS and EPO Prescription Plan: Express Scripts, Inc. Dental Plan: United Concordia DPPO (also has Out-of-Network coverage) *CareFirstBCBS-POS plan has In-Network providers in the Maryland Service Area only
Retiree Group Coverage is Secondary to Medicare Whether or not you are working, if the cost foryour State medical benefits is deducted from a Maryland State Agency pension, you are in a Retiree Group. If you are in a Retiree Group and are eligible for Medicare by way of: ●Age (at age 65) OR ●Disability (at any age): Medicare is your primary insurer; the State plan is secondary to Medicare. Both Parts A (hospital) & B (medical) are required for coverage. Without Part B, you will be responsible for 80% of claim costs that Part B would have covered. • If you receive a Social Security income, Social Security should mail your Medicare card to you about three months before your Medicare eligibility date. • If you are not receiving a Social Security income, you should contact Social Security to enroll in Parts A and B the month prior to eligibility. • You are responsible for notifying the Employee Benefits Division of Medicare eligibility due to a Disability or End Stage Renal Disease (ESRD) at any age.
Medicare Initial Enrollment Period(7 months) Exception: • If you were born on the 1st day of the month: • Seven-month IEP begins and ends one month earlier; • Eligible for Medicare month before reaching age 65.
If you or your spouse are eligible for Medicare when retiree-group coverage begins:(Not Applicable to Domestic Partners) You will have a Special Enrollment Period (SEP) for Part B, if you: • move from an active employee-group to a retiree-group coverage, and • do not turn age 65 within six months (before or after) the month employee-group coverage ends. A Special Enrollment Period is offered when you move from an active employee group coverage to a retiree group coverage, and the penalty for delayed enrollment in Part B is waived. Exception: If employee group coverage ends during your Initial Enrollment Period, Special Enrollment Period rules do not apply. Contact Social Security in the first three months of your Initial Enrollment Period (the three months prior to reaching age 65) to find out how to make your Part B coverage begin when you retire. NOTE:According to federal regulations, Special Enrollment Period rules do not apply to Domestic Partners.
Medicare General Enrollment Period(3 months from January 1st through March 31st each year) If you were eligible but not enrolled in Medicare and you did not have health benefits coverage under an active employee’s policy, your Part B premium will be penalized 10% for every 12 months you were entitled to Part B but not enrolled.
Doctor Visit Co-pay(with doctors that participate with Medicare) If you have: • Medicare Parts A & B as your primary insurer, and • State Retiree Group coverage as your secondary insurer: Medicare will pay the Medicare-allowed amount and the State plan will pay the balance; therefore, you will not have a co-pay.
You do not have to enroll in Medicare Part D (Prescription Drug) You may: • Keep the State of Maryland prescription plan and not enroll in Medicare Part D; • Enroll in Medicare Part D (Enroll 10/15-12/7 each year) and cancel your State of Maryland prescription plan; OR You may also enroll in both Medicare Part D (Enroll 10/15-12/7each year) and the State’s prescription drug plan; however, you will be paying premiums for both plans and the is no coordination of benefits between the plans.
Which prescription plan is best for me? • For most people, the State of Maryland prescription plan is the best value, but you must decide which plan is best for you by considering premiums, deductibles, co-pays, coverage gaps, and maximum out-of-pocket costs for each plan. • The State of Maryland prescription coverage is Creditable Coverage (as good as or better than Standard Medicare Part D). • If you keep the State prescription plan, you can still enroll in Medicare Part D at a later date without incurring a Part D penalty (as long as you do not have a break in coverage of 63 days or more).
Retirement Options and Spouse Beneficiaries* • Options 2,3,5 and 6 • Allow a surviving spouse (if designated as retirement beneficiary) to continue coverage with same State subsidy as the retiree • Options 0,1 and 4 • Surviving spouse is not eligible for continued subsidized health benefits • Health benefits will be available under COBRA for up to 36 months with no State subsidy and 2% administrative fee * includes same sex spouses
Retirement Options and Domestic Partner Beneficiaries • Regardless of the Retirement Option selected, Domestic Partner Beneficiaries are not eligible for subsidized group health benefits upon the retiree’s death • Parallel COBRA coverage will be available for up to 36 months with no State subsidy and a 2% administrative fee
Retirement Options and Child Beneficiaries • A Child Beneficiary who continues to receive a monthly retirement benefit is not eligible for subsidized health benefits unless he/she would meet the criteria for Dependent Child coverage if the retiree were still living • If the Beneficiary meets the Dependent Child criteria, eligibility for subsidized coverage will end if/when the child no longer meets the criteria. The Dependent Child is eligible to receive health benefits through the end of the month the Dependent Child reaches age 26 based on the current contract.
After you retire, you may receive: • A “No Pay” letter from the Employee Benefits Division • A “Non Group Bill” from your health plan (a conversion bill on health plan letterhead) DON’T WORRY!!! These forms may have been printed automatically due to the cross-over of paperwork. If deductions don’t occur on your first retirement check, coverage can be made retroactive to your date of retirement. You will receive a letter from our office indicating the amount you must pay for continuous coverage.
Websitewww.dbm.maryland.govclick on Health Benefits for State Employees Phone 410-767-4775 or Toll Free 1-800-30-STATE (1-800-307-8283)