Health Benefit Coverage after Retirement (Part 1)
Among the questions most frequently asked by administrators contemplating retirement are ones regarding continuation of health benefit coverage for the retiree and the retiree’s dependents. The answer(s) to this question can be complicated by the type of retirement, the age of the retiree and/or the ages of the retiree’s spouse and dependents, the total years of service credit of the administrator at the time of retirement, the years of credit with which the retiree was credited on June 28, 2011 and the health insurance carrier providing coverage to the district from which the administrator is retiring. Further complicating the picture are situations in which both partners are New Jersey public employee retirees who are eligible for his/her own retired health benefits or are surviving spouses of retirees who had been providing the coverage prior to dying. The answer(s), therefore, are ones that requires more than a single column on my part. This column will be the first of a series that deals with health benefits.)
Here are a few basic facts about retired health care coverage:
1. Every administrator who retires from a public teaching position in New Jersey and begins receiving his/her pension at that time is eligible to continue lifetime health benefits in retirement;
2. Retirees can receive health benefits (1) without any cost to them, (2) by paying a portion of the cost or (3) by paying the entire cost. Total years of credit in the pension system at retirement and years of credit in the system of June 28, 2011 determine into which of these three categories a retiree falls.
3. Administrators retiring on a Disability Retirement receive lifetime health benefits in retirement without cost.
4. Multiple coverage, where each spouse is a State retiree, is prohibited. It is not possible for each spouse to have coverage and also provide coverage for the other spouse. Each may have single coverage or one may have coverage as a retiree (self) and cover the other spouse as a dependent.
5. Retirees and/or spouses eligible for Medicare must join Parts A and B in order to continue their State provided health benefits after they reach the point of eligibility. (Eligibility for Medicare is age 65 or twenty-four months after receiving a Social Security Disability approval, whichever comes first.) Administrators who continue to work beyond age 65 and have health insurance coverage from their employer should consult both their business office and the Social Security Administration several months before turning 65 to determine their future status.
6. Administrators who have a change in eligible dependents after retirement may provide coverage for the new dependents. (Eligible dependents include a spouse, a civil union partner, an eligible same-sex domestic partner and children under age 26.)
7. Surviving spouses of retirees who die are offered continued lifetime coverage. The cost of the continued coverage is the responsibility of the surviving spouse regardless of how the coverage had been paid before the death of the retiree.