Defined Contribution Plan
DEFINED CONTRIBUTION PLAN
Continuation of Group Insurance System
|The Employee Benefits Division (EBD) of the Michigan Civil Service Commission is responsible for the administration of the group insurance programs offered to State employees and their eligible family members. As part of this responsibility, the EBD provides for the continuation of the group insurances pursuant to collective bargaining agreements and Federal law called COBRA.
Group insurances can continue for various periods of time for persons who leave the payroll for reasons such as leave of absence, layoff, Family Medical Leave Act (FMLA) leave, workers' compensation, separation and retirement.
Persons who are participants in the Defined Contribution Retirement Plan and who meet certain age and/or service provisions at the time of their separation from State employment may continue their insurance.
Eligible retirants may choose Blue Cross Blue Shield of Michigan PPO as their claims processor under the State Health Plan. As an alternative, certain HMO's have made arrangements with the State of Michigan to allow for coverage after retirement. New and current retirants enrolled in the Defined Contribution Plan should check with the Office of Retirement Services to find out which HMO's are available.
Cost and Eligibility for Insurance Coverage
|For persons who transferred from the Defined Benefit Plan to the Defined Contribution Plan, and subsequently retire, there is a 80% state subsidy for health insurance, and a 80% state subsidy for dental and vision. For persons who were first hired on and after March 31, 1997, the state subsidy will depend upon the employee's number of years of service. Beginning with ten years of service, the state subsidy for health, vision and dental insurance will be 30%, with the retired employee paying the remainder. For each additional year of service, the state subsidy will increase by 3%, with a maximum of 80% with 30 or more years of service.
Life insurance is provided at no cost to the retirant and represents coverage of 25% of the amount of the employee's coverage as an active employee. Dependent life insurance coverage is reduced to $1,000 for the spouse and also $1,000 for dependent children until age 23 at no cost. There must be no lapse in your life insurance coverage from your separation from State payroll until you apply for continuation of life insurance coverage.
When either you or your spouse become age 65, you or your spouse must enroll in both Part A and Part B of Medicare. Persons in receipt of disability benefits and who are offered Medicare coverage should enroll in both Parts A and B of Medicare as soon as they are offered.
|Persons enrolled in the Defined Contribution Plan who meet the following age and/or service requirements at their date of separation from State employment are eligible for continuation of group insurance through the retiree group. These are the same age and/or service requirements that must be met for full retirement benefits under the Defined Benefit Retirement Plan. Insurance benefits are effective the first of the month following the date these requirements are met. Coverage through the active group will be extended from the date of separation to the effective date of the insurance coverage in the retiree group provided the date of separation occurs in the month prior to the insurance effective date. Eligible dependents include your spouse and any of your unmarried children until the day before they turn 19. In addition to being unmarried, children must meet the following conditions to be considered eligible. They must be:
PLEASE NOTE: The following eligibility requirements apply to insurance coverage only for Defined Contribution retirants:
|Regular Retirement : Age 60 with 10 years of service in the executive or judicial branches or age 60 with 5 years of service for persons in the legislative branch and persons occupying exempt or excepted positions, who transferred from the Defined Benefit Plan to the Defined Contribution Plan.
Age 60 with 10 years of service for persons in the Defined Contribution Plan who were never members of the Defined Benefit Plan.
Age 55 with 30 years of service.
Covered Service : Age 51 with 25 years of service in a covered position, the last three in a covered position.
Age 56 with 10 years of service in a covered position, the last three in a covered position.
Persons in covered positions are generally persons whose position requires them to have custody and/or supervision of residents of correctional facilities.
Conservation Officers : Twenty-five years of service as a Conservation Officer. For Conservation Officers employed prior to April 1, 1991, 20 of the 25 years and the last two years must have been as a Conservation Officer. For Conservation Officers hired on and after April 1, 1991, 23 of the 25 years and the last two years must have been as a Conservation Officer.
Mental Health Facility Closures: Age 51 with 25 years of service for persons employed by the mental health facility(s) designated for closure. The last five years of service must be in the closed mental health facility(s).
Age 56 with 10 years of service for persons employed by the mental health facility(s) designated for closure. The last five years of service must be in the closed mental health facility(s).
Twenty-five years of service (no age requirement), all being with the mental health facility(s) designated for closure.
|Persons enrolled in the Defined Contribution Plan who have met the service requirements for Regular Retirement but who have not met the age requirements on the date of separation from State employment are considered deferred retirants and are eligible to enroll in health, vision and dental insurance upon reaching the age of 60. The amount of premium to be paid by the State will depend upon the date of hire (see "Cost"). Life insurance is not available to deferred retirees through the retiree group.
At age 60, the deferred retiree should contact the Office of Retirement Services to request the necessary forms to enroll in the health, vision and dental insurance (see Page 6).
If death occurs prior to age 60, the named insurance survivor(s) will be entitled to enroll in health, vision and dental insurance, on the date the deferred retirant would have reached age 60.
|Persons enrolled in the Defined Contribution Plan who are applying for disability retirement will be eligible to enroll in health, vision and dental insurance immediately upon approval by the State Employees' Retirement Board. The cost for the coverage will be the same as if the disability retirant were retiring from the Defined Benefit Plan.
Non-duty disability benefits are available to persons who meet the standard for disability retirement and who have at least ten years of service with the State of Michigan. Duty disability benefits are available to persons who meet the standard for disability retirement and whose disability is the direct result of State employment. There is no service or age requirement for duty disability retirement.
For persons approved for disability retirement, life insurance is covered by a Waiver of Premium. A Waiver of Premium entitles the disability retirant to the same amount of life insurance for which he/she was covered as an active employee at no cost as long as there is no lapse in coverage. This benefit is available until age 65, at which time the coverage is reduced to 25% of the active coverage.
|If you die as an active employee, your spouse and eligible dependents, who were covered at the time of your death, are eligible to continue insurance coverage if you meet the service requirements for Regular Retirement. Age requirements do not apply.
If you die as a result of injuries on the job, your spouse and eligible dependents, who were covered at the time of your death, are eligible to continue insurance coverage. There are no age or service requirements.
Eligible insurance survivors of persons on deferred retirement will be entitled to enroll in the health, vision and dental programs on the date the deferred retirant would have reached the age of 60.
If the death of a retirant in the Defined Contribution Plan occurs after insurance coverage commences, the surviving spouse and/or eligible dependent children covered by insurance at the time of death, will be entitled to continue coverage in the retiree group for health, vision, dental and dependent life insurance coverage.
Under any of these circumstances, the survivor should immediately contact the Office of Retirement Services.
If you or your survivor(s) meet the eligibility requirements for insurance benefits, contact the Office of Retirement Services:
Go to the Office of Retirement Services website for forms:
The Office of Retirement Services will then verify your eligibility for immediate continuation of group insurance. If you are entering deferred retirement, the Office of Retirement Services will retain your "Deferred Retiree Nomination of Group Insurance Beneficiary" form.
The Office of Retirement Services will transmit your insurance enrollment data to the various insurance carriers, and you will receive the appropriate identification (ID) cards from the insurance carriers.
The Office of Retirement Services will send you payment coupons for the retiree share of health, and/or vision, and/or dental insurance. You will receive instructions on where and when to send your payments.
If you experience what the Internal Revenue Service (IRS) terms a "family status change" (marriage, divorce, death, birth of a child, moving out of your insurance coverage area), you must submit your "Defined Contribution Group Insurance Change Request" form within 30 days of the event in order for your insurance change to be effective on the date that the event occurred. Coverage for an ex-spouse must terminate on the date of the divorce, and if notification of the divorce is not made within 60 days of the date of divorce, your ex-spouse's rights to continuation of insurance coverage under COBRA will be forfeited.
If eligible for life insurance coverage, Office of Retirement Services will send a final letter to the retiree with the amount of life insurance available to the retiree and any dependents along with claim filing instructions for your beneficiaries in the event of your death.
Once you have begun to receive billings for your insurance, questions should be directed to:
For persons retiring under Service Retirement, insurance coverage will take effect the first of the month following the last day on payroll or the date the enrollment form is filed, whichever is later.
For persons retiring on disability retirement, the insurance effective date is generally the first of the month following the date the Retirement Board approves the application for disability retirement.
For deferred retirants, the effective date for insurance is the first of the month following date of enrollment or age 60, whichever is later.
For persons eligible for death benefits, the effective date of insurance is the first of the month following the date of the member's death, or the date of enrollment, whichever is later. If the deceased was a deferred retiree, the effective date for insurance is the first of the month following the date the deferred retiree would have reached age 60, or the date of insurance enrollment, whichever is later.