Health Insurance Credit

Who is eligible for the health insurance credit?
How do I apply for the health insurance credit benefit?
Will I need to submit a Request for Health Insurance Credit if VRS is taking deductions for my health insurance?
Will I need to submit a Request for Health Insurance Credit if I am a long-term disability participant and enrolled in the Commonwealth of Virginia Health Benefits Program?
How do I determine the date I will be eligible to receive my health insurance credit?
What plans qualify for health insurance credit reimbursement?
What plans do not qualify for the health insurance credit reimbursement?
How is the reimbursable amount determined?
If I apply after the start date of my health insurance coverage, am I entitled to retroactive reimbursement of the health insurance credit?
If I am paying a premium for family health coverage or if I am covered on my spouse’s plan, will I be entitled to a health insurance credit?
What if my health insurance premium changes or my coverage is cancelled?
Does the health insurance credit transfer to the eligible member's spouse and/or dependent when he or she dies?
Will eligibility for the health insurance credit continue if I cancel my health insurance coverage?
What if I have state or teacher service credit but retire from a local agency that does not offer the health insurance credit?

1. Who is eligible for the health insurance credit?

The following employees who retire with at least 15 years of service credit may be eligible: State employees, teachers, school administrators, employees of local school boards, employees of participating local governments, local general registrars and employees of general registrars, local officers and local social service employees. Members retiring on VRS disability or receiving a long-term disability benefit through the Virginia Sickness & Disability Program (VSDP) also are eligible.

2. How do I apply for the health insurance credit benefit?

Retirees should complete and send the Request for Health Insurance Credit VRS-45 75kb to VRS. The credit will be added to the monthly retirement benefit. Those who do not receive a monthly retirement benefit will receive a check from VRS for the reimbursable amount.

Those on long-term disability through the Virginia Sickness & Disability Program should obtain the form from Unum and return it to P.O. Box 9500, Portland, Maine 04104-5058. For more information, call 1-800-652-5602. The credit will be added to the long-term disability benefit.

Employers must certify eligibility for retirees who have service as a local officer, or local social service employee but are not retiring from one of these positions. To certify eligibility, complete the Certification of Employment Health Insurance Credit Eligibility VRS-76.

3. Will I need to submit a Request for Health Insurance Credit if VRS is taking deductions for my health insurance?

No. The health insurance credit is automatically added to your monthly retirement check.

4. Will I need to submit a Request for Health Insurance Credit if I am a long-term disability participant and enrolled in the Commonwealth of Virginia Health Benefits Program?

No. You are not required to submit a form unless you are a covered dependent of an active state employee.

5. How do I determine the date I will be eligible to receive my health insurance credit?

The payment of your health insurance credit is based on the date of your eligibility and the date that you enroll in a qualified health insurance plan and begin paying a premium.

6. What plans qualify for health insurance credit reimbursement?

Medicare Part B coverage;
Employer-sponsored plans, including the Commonwealth of Virginia Health Benefits Program;
Dental, vision and prescription drug plans; and
Any plan that provides a broad range of medically necessary services.

7. What plans do not qualify for the health insurance credit reimbursement?

Coverage for specific diseases or procedures to treat specific illnesses, such as cancer insurance; hospital indemnity policies that pay a daily amount for each day spent in the hospital; and plans covering home health care, long-term care, long-term disability or life insurance coverage are not eligible.

8. How is the reimbursable amount determined?

The monthly health insurance credit is determined by multiplying your years of service at the time you retire by a dollar amount, which is set by the General Assembly. The dollar amount, as well as the maximum amount you can receive each month, varies depending on your employer. See Health Insurance Credit Dollar Amounts.

If you are on long-term disability through the Virginia Sickness and Disability Program (VSDP) or a state employee who retires on disability, you are eligible for the greater of $120 per month or $4 per year of your creditable service per month at the time you become disabled.

If you retire on disability from a political subdivision employer that offers the health insurance credit, you are eligible for a monthly health insurance credit amount up to $45, regardless of the amount of your service at the time you retire on disability.

If you are a teacher, school administrator or school board employee and retire on disability effective July 1, 2007, you are eligible for a monthly health insurance credit equal to either (1) $4 multiplied by twice the amount of your creditable service at the time you become disabled; or (2) $4 multiplied by the amount of service you would have earned had you remained an active employee until age 60, whichever amount is less. If you are currently retired on disability, your health insurance credit will change only if one of these formulas would provide you a higher amount.

9. If I apply after the start date of my health insurance coverage, am I entitled to retroactive reimbursement of the health insurance credit?

Yes. You can receive reimbursement retroactive to your eligibility date up to a maximum 12-month retroactive period from the date VRS or Unum, the VSDP third-party administrator, receives your completed Request for Health Insurance Credit.

10. If I am paying a premium for family health coverage or if I am covered on my spouse’s plan, will I be entitled to a health insurance credit?

Yes. Reimbursement is based on your portion of the premium. If you cannot determine your portion of the premium, VRS will determine your reimbursable health insurance credit amount.

11. What if my health insurance premium changes or my coverage is cancelled?

It is important to notify VRS, or Unum if you are on long-term disability, immediately in the event your premium changes or your coverage is cancelled. If VRS is not notified, you may receive an overpayment of your health insurance credit. You would be responsible for repaying the amount. You also may be required to pay income taxes on reimbursements that exceed the cost of your health insurance premium. Retirees should notify VRS of any health coverage changes, including changes to the effective date, by submitting a new Request for Health Insurance Credit. VSDP participants should notify Unum directly.

12. Does the health insurance credit transfer to the eligible member's spouse and/or dependent when they die?

No. The health insurance credit terminates at the death of the eligible member.

13. Will eligibility for the health insurance credit continue if I cancel my health insurance coverage?

You remain eligible for the health insurance credit if you cancel your health coverage. If you enroll in and begin paying premiums for another qualified health plan, submit a new Request for Health Insurance Credit.

14. What if I have state or teacher service credit but retire from a local agency that does not offer the health insurance credit?

If you have a minimum of 15 years as either a teacher or a state employee, you will be eligible for the health insurance credit based on that service. Teaching and state service cannot be combined to qualify for the credit under these circumstances.