Key Choices to be Made
Obviously retirement means a change in source of income. It also means significant changes in medical and health coverage. All of the following insurance coverages will terminate, either on the last day of work or at the end of the retirement month: basic term life, voluntary group life, personal accident, short-term and long-term disability coverage, plus medical and dental insurances. A few of these are portable into retirement in one way or another. However, making choices regarding future income streams and insurance coverages are probably the most important set of decisions to be made during the retirement process. Human Resources has detailed check lists and expertise to assist with these choices. The options listed here include a few of the critical details. This list is only to ensure that individuals know what options they may have so that they can explore their choices fully.
Retired faculty and administrative professionals will receive their university supported retirement income from either PERA or from the Defined Contribution Plan (DCP) or in a few cases both. In the case of DCP retirement, individuals should contact their plan provider for a full discussion of options, regulations, etc.
PERA’s website offers a great deal of information, including several online calculators to work through preliminary estimates of benefits. As retirement approaches, and a date has been selected, individuals should contact PERA (1-800-759-7372) for an official estimate and packet of forms and materials needed to initiate retirement from PERA. A key PERA choice is whether to select Option 1, 2 or 3 for payout of retirement funds. These options affect how much of the retirement benefit is paid to the retiree during his or her lifetime and how much is paid to the beneficiary, if any, after the retiree dies.
Note that individuals may qualify for lump-sum payments of accumulated sick leave and annual leave. Sick leave payments are limited to 15 days accumulation. Only 12 month employees qualify for payment of accumulated annual leave, and this is limited to a maximum of 24 days. Contact Human Resources for complete information.
Medical Coverage Options
PERACare is PERA’s health benefits program for people receiving PERA benefits. PERACare is composed of health, dental, and vision care programs. The cost of the health portion of PERACare is subsidized by PERA and the University based on your years of PERA service and age at retirement. You may be enrolled in any or all three types of coverage, and you may also enroll your eligible dependents in any of the plans in which you participate. If you might be eligible contact PERA, to get a copy of the PERACare booklet.
Medicare is the federal government’s medical insurance program which is available to anyone age 65 or over, whether retired or not. Medicare choices comprise Part A (hospital insurance), Part B (medical insurance) and Part D (prescription drug insurance). Part A is provided at no cost for those with qualifying employment or whose spouse is Medicare eligible. There is a premium for Part B which can vary from year to year. It is critical to consult with a Medicare (Social Security) office since there is a specified window of time within which you may apply for Medicare. Missing this window results in a significant penalty which gets larger with length of delay.
CSU Medical Premium Refund
CSU has a premium refund policy for DCP retirees which will cover up to $200, for persons with 20 years of employment – prorated for fewer years of service – of medical premiums paid. This amount can be applied to premiums for medical plan insurance, or Medicare. Timing is essential in terms of application. Annual certification of amounts paid for medical insurance is required. Contact Human Resources for specific information.
CSU Umbrella Rx Plan
The “umbrella plan” is a prescription only reimbursement plan available to academic faculty and administrative professional retirees and their spouses and dependents with at least 5 years of CSU service. This plan supplements the prescription benefits available through PERA and is only available if you are enrolled in Medicare (Part A, if eligible, and Part B) and a PERACare Medicare Supplement Plan. Contact Human Resources for specific information.