What happens to my state health coverage when I retire?
Faculty and staff who retire with a Virginia Retirement System (VRS) defined benefit, and faculty covered by the VCU Optional Retirement Plan (ORP) who meet the age and service requirements for a VRS defined benefit under the VRS plan for which they were eligible at the time they elected the ORP, are eligible for the state retiree health benefits program as long as they:
- meet the eligibility criteria at the time of separation from VCU
- if covered by VRS, immediately begin receiving a monthly VRS defined benefit, and
- enroll in the state retiree health benefits program within 31 days of losing eligibility for active coverage in the state employee health benefits program
In order to begin receiving a VRS defined benefit, an employee must completely separate from all employment with VCU and the Commonwealth of Virginia, with no prearranged agreement to return, for a period of time that qualifies as a bona fide separation from employment with the Commonwealth that satisfies IRS requirements and state policy. This is generally a minimum of one calendar month during a period in which the employee would have worked in the job from which s/he retired. Summer breaks do not count as a bona fide separation for academic-year faculty, since they occur during a period when those faculty members do not work in their VRS-covered position. Retiring faculty members wishing to take distributions from the ORP must meet the same separation requirements.
For 12-month faculty and staff, employee coverage eligibility ends on the last day of the month in which the retiree separates from a VRS- or ORP-covered position. For academic year faculty who complete their contracts ending in Spring, employee coverage eligibility ends on August 31st. Retiree coverage starts on the first of the month immediately after employee coverage eligibility is lost, as long as the eligibility and enrollment requirements for retiree coverage are met. Faculty and staff who separate from VCU but do not meet the eligibility and enrollment requirements for retiree health coverage can enroll in Extended Coverage (COBRA) instead, but this coverage is generally limited to 18 months.
The retiree health plan choices and premiums depend upon whether each retiree and/or covered family member is eligible for Medicare. For more information, see Eligibility, Enrollment and Plan Choices. Medicare-eligible retirees or retirees with Medicare-eligible covered family members can also review Medicare and the State Retiree Health Benefits Program. Retirees with 15 or more years of state service may also be eligible for a health insurance credit to assist with the cost of retiree premiums. For more information, see Health Insurance Credit. General information about the state retiree health plans and premiums can be reviewed on the Virginia Department of Human Resource Management’s web site under the “For Retirees” menu.
VCU Benefits offers monthly seminars for faculty and staff who are planning to retire. For VRS participants, see “How to Retire With VRS.” For ORP participants, see “Retiring With the VCU Optional Retirement Plan.”