Psers Health Options Program (Page 2 of 2) in pdf

PREMIUM ASSISTANCE PROGRAM

The Public School Employees’ Retirement System (PSERS) provides health insurance Premium Assistance as a full or partial

reimbursement for an eligible retiree’s out of pocket premium expense from approved plans. To be eligible for Premium Assistance

you must satisfy both the Service, Age and Service, or Retirement Type Requirements and the Approved Plan Requirements. These

requirements are as follows:

SERVICE, AGE AND SERVICE, OR RETIREMENT TYPE REQUIREMENTS

You have at least 24.50 years of credited service.

You have at least 15.00 years of credited service provided your public school employment terminated and retirement

occurred on or after superannuation age. Superannuation age is 62, or age 65 if you first became a school employee and

an active member on or after July 1, 2011 (Membership Class T-E or Class T-F).

You are receiving a disability retirement benefit from PSERS.

APPROVED PLAN REQUIREMENTS

You must have an out-of-pocket premium expense for your basic health insurance coverage from:

PSERS' Health Options Program.

A Commonwealth school employer's (PSERS' reporting unit) group health insurance plan providing hospital, medical, and

major medical coverage.

BENEFIT

The Premium Assistance benefit will reimburse eligible retirees up to $100 per month for their out of pocket premium expenses paid to an

approved plan. It is not payable for premium expenses for the retiree's spouse or dependents. As a reimbursement, Premium Assistance

cannot exceed the retiree’s actual out-of-pocket premium expense and is not treated as taxable income. PSERS adds Premium

Assistance payments to the eligible annuitant’s monthly retirement benefit.

OUT-OF-POCKET EXPENSE

An out-of-pocket expense must be paid by the retiree for the retiree’s health insurance coverage. Payments from a school employer that

are not taxable to the retiree are not eligible for Premium Assistance. For example, if the school employer agrees to provide ongoing

health insurance coverage in lieu of accumulated sick leave and the retiree does not pay taxes on the value of the sick leave, the retiree

does not have an out of pocket expense and is not eligible for Premium Assistance. If the retiree is covered under his or her spouse’s

school employer plan and premiums are paid pre-tax, the retiree does not have an out-of-pocket expense and is not eligible for Premium

Assistance.

VERIFICATION OF OUT-OF-POCKET EXPENSES

Each year PSERS must verify that Premium Assistance recipients have an actual out of pocket expense from an approved plan. For

retirees participating in their school employer’s plan, PSERS requests that the school employer verify the retiree’s premium payment.

Unverified payments must be returned to PSERS by the recipient. (See “Overpayments.”)

TERMINATION OF PREMIUM ASSISTANCE

It is the responsibility of the Premium Assistance recipient (retiree) to notify PSERS if they no longer have an out-of-pocket premium

expense from an approved plan. If a Premium Assistance recipient terminates their coverage under a Commonwealth school

employer’s plan, it is the responsibility of the retiree, not the school employer, to notify PSERS to discontinue Premium Assistance

payments. The Premium Assistance Election Form signed by the retiree clearly states this responsibility.

If the retiree enrolls in the Health Options Program immediately following the termination of coverage in the school employer’s plan,

there will be no interruption in Premium Assistance payments.

OVERPAYMENTS

If a retiree receives Premium Assistance for a month he or she does not have an actual out of pocket expense from an approved plan or

their Premium Assistance benefit exceeds the amount of their actual out of pocket premium expense, that overpayment must be returned

to PSERS. Commonwealth law limits PSERS authority to waive a debt payable to the Commonwealth.

Once it is determined that a Premium Assistance overpayment has been made, PSERS will request that the recipient return the

Premium Assistance overpayment. If a recipient cannot or will not return overpayments to PSERS, monthly deductions will be made

from the retiree’s monthly retirement benefit in an amount determined by PSERS until the debt is paid. PSERS will not charge

interest against the unpaid balance of the debt.

If a retiree dies prior to the full repayment of a Premium Assistance debt, the outstanding amount will be deducted from any prorated

retirement benefit or death benefit due the estate or beneficiary of the deceased retiree.

TAX STATUS OF PREMIUM ASSISTANCE PAYMENTS

Premium Assistance benefits are deemed to be reimbursements of actual out-of-pocket premium expenses. As such, the 1099-R issued

by PSERS does not reflect Premium Assistance payments as taxable income. (PSERS notifies recipients by letter after the end of the

calendar year advising them of the amount of Premium Assistance paid during the preceding year. Retirees may use this information if

they itemize their annual medical expenses.)

1.866.483.5509.

If you have questions about Premium Assistance or need an application, please call toll-free

PSERS Health Options Program

Page 2 of 2

Psers Health Options Program Page 2

Related Articles

Related forms

Related Categories