Leaving Employment

Basic Group Life Insurance Coverage

If you leave covered employment before you have reached retirement eligibility or if you take a refund of your retirement contributions and interest in your member contribution account, your coverage under the Basic Group Life Insurance Program will end within 31 days of the end of the month in which the last premium is paid. If you die before the end of this period, your beneficiary will receive a benefit equal to your natural death benefit.

If you have reached retirement eligibility and do not take a refund of your retirement contributions and interest, you will be eligible for retiree group life insurance coverage, provided you are covered under the program before you leave employment. For more information, see Insurance in Retirement.

Optional Group Life Insurance Coverage

If you have optional group life insurance coverage and you, as well as your spouse and dependent children if you enroll them in the program, have been covered during the 60 months preceding your last day of employment, you may continue a portion of this coverage after you leave employment. If you do not elect to continue your coverage and die within 31 days of the last day of the month in which the last premium is paid, your beneficiary will receive your optional life insurance natural death benefit.

Converting Your Group Life Insurance Coverage

You have the option to convert your group life insurance coverage to an individual policy. You will be billed for the premiums. Submit a Conversion of Group Life Insurance Enrollment (VRS-35E) 186kb to Minnesota Life within 31 days of the last day of the month in which you leave covered employment. This option is not available after 31 days.

For more information about your life insurance coverage or converting your coverage, contact:

Joseph Chang, Manager, Richmond Office
Minnesota Life
P.O. Box 1193
Richmond, VA 23218-1193
1-800-441-2258

State Employees

Your health insurance coverage ends on the last day of the month in which you leave covered employment. You may elect to extend your health insurance for up to 18 months from this date. You pay the cost of extended coverage. You have the option to convert your health insurance to an individual policy. You will be billed for the premiums. For more information, visit the Department of Human Resource Management Web site or call Anthem Blue Cross/Blue Shield toll free at 1-800-334-7676.

Teachers and Political Subdivision Employees

Before you leave covered employment, contact your human resource office for more information about continuing or converting your health insurance coverage.

VSDP Coverage

If you are enrolled in VSDP and leave your position, your eligibility for VSDP benefits ends with your last day of employment. You are eligible for a payment of any unused disability credits, up to $5,000. If you are retiring or deferring your retirement, you have the option to convert your unused disability credits to service credit toward calculating your benefit. You must submit a VSDP Conversion of Disability Credits (VRS-5A) 27kb to VRS before leaving your position.

VSDP Long-Term Care Coverage

If you leave or retire from a VSDP-covered position, you can elect to continue your long-term care coverage. You will be billed for the premiums. Submit a VSDP Long-Term Care Plan Authorization of Coverage Retention (VRS-170) 27kb and VSDP Long-Term Care Plan Protection Against Unintentional Lapse (VRS-171) 26kb to the Long Term Care Group, Inc. at P.O. Box 64011, St. Paul, Minnesota 55164-0011 within 60 days of the last day of employment. This option is not available after 60 days.

For more information about the plan, see VSDP Long-Term Care Plan.

If you do not participate in the Virginia Sickness and Disability Program (VSDP), you may be eligible to be paid for any unused annual leave or sick leave when you leave covered employment. Check with your human resource office for more information.

If you participate in one or both of these plans, you have the following options when you leave covered employment:

• Keep your funds in your plan. Your account continues to be tax-deferred, and you continue to manage your investments. You cannot contribute to your 457 Plan unless you return to salaried or wage employment with an employer that offers the plan.
• Request a payment (distribution) from your plan. You may request your funds in a lump sum, as a periodic payment or a combination of these methods. Federal and state income taxes as well as a penalty for early distributions will apply to funds you receive from the Virginia Cash Match Plan. There is no penalty for early withdrawal of 457 Plan funds. However, funds you receive from your 457 Plan account are subject to federal and state income taxes. Note: A required minimum payment will begin if you have not arranged to begin receiving payments from your plan by age 70½ or if you leave employment after age 70½.
• Contribute annual leave, sick leave or other payments to your 457 Plan. If you are eligible to be paid for any unused annual leave or sick leave or to receive other compensation when you leave or retire from your position, you can defer taxes on this payment by contributing it to your 457 Plan. To elect this option, submit the 457 One-Time Deferral Form 186kb to your employer while you are still employed or no later than the month before you would otherwise receive the payment.
• Roll over cash match funds to another plan. You may roll over your account balance from your plan to another qualified plan such as an Individual Retirement Account (IRA); the 401(a), 401(k), 403(b) or 457(b) plan; or the Federal Employees Thrift Savings Plan. Check with your plan sponsor to determine if your plan accepts rollovers as well as any fees or penalties that may apply.

For more information, see Defined Contribution Plans.