Retiree Frequently Asked Questions

The Group Life Insurance Plan is administered by the Virginia Retirement System on behalf of its employers. VRS also administers service retirement and disability benefits for state employees, public school teachers and employees of participating political subdivisions. Securian Financial is the provider for the Group Life Insurance benefit and for the Optional Life insurance benefit.

You are eligible for group life insurance benefits if you are a permanent, salaried:

• state employee,
• public school teacher,
• administrator, or clerical employee of a school division;
• an employee of a participating political subdivision, or
• a member of the support staff of a school board.

Employees who work on a temporary or wage basis are not eligible.

The amount of your life insurance coverage is equal to your annual compensation rounded to the next highest thousand, then doubled. Example: If your annual compensation is $25,300, it is rounded to the next highest thousand -- $26,000. When doubled, it is $52,000 -- that is your coverage for natural death. If your death is the result of an accident, the amount of your coverage is twice that for natural death. In the example above, the amount of your coverage for accidental death would be $104,000 ($52,000 doubled). You also have coverage if, through an accident, you become blind, or lose an arm or a leg. For the loss of one limb or the sight of one eye, you receive a payment equal to your annual compensation rounded to the next highest thousand. The maximum amount of dismemberment insurance paid for loss of two or more limbs or sight in both eyes is equal to the natural death coverage.

In many cases, the employer pays the premium for members. Otherwise, the premium may be automatically deducted from your compensation. Your employer can advise you of the current premium amount.

After you retire, your life insurance continues at no cost to you provided you meet the eligibility requirements under your retirement plan. The amount of your insurance reduces by 25 percent annually starting January 1 following 12 months of retirement, and on every January 1, thereafter, until your coverage reaches 25 percent of its value at your retirement. Reduction begins on the January 1 following the first 12 months from the date you separate from service if you are eligible to retire but defer receipt of your annuity. At its fully reduced level, you will have approximately one-half of your pre-retirement compensation in life insurance. If you have at least 30 years of creditable service, your coverage cannot reduce below $8,000. This minimum will be increased annually based on the VRS Plan 2 cost-of-living adjustment calculation.

If you have VRS group life insurance coverage, some basic benefits will continue after you retire on disability. Your coverage will begin to reduce by 25 percent beginning on the January 1 following one calendar year from your normal retirement age under your plan. It will continue to reduce by 25 percent each January 1 until it reaches 25 percent of its original value.

If you have at least 30 years of creditable service, your coverage cannot reduce below $8,000. This minimum will be increased annually based on the VRS Plan 2 cost-of-living adjustment calculation.

If you took either a service or disability retirement before July 1, 2001 you continue to have your basic group life insurance reduce 2 percent per month until it reaches 25 percent of its value at retirement.

Although accelerated death benefit and the right to voluntary irrevocable assignment continue into retirement, accidental death and dismemberment coverage cease.

You can continue life insurance coverage while you are on leave, including military leave, up to a total of 24 months if your premiums are submitted monthly through your employer.

Your group life insurance coverage ends when you leave your job before you become eligible for retirement. You may convert to an individual whole-life policy at non-group rates, however, by filing a Conversion of Group Life Insurance Enrollment (VRS35-E) that you may obtain from your employer or from Securian Financial. The conversion must take place within 31 days of the last day of the month in which you terminate employment. Members who are eligible to receive a retirement benefit upon termination may not convert to an individual policy. Information on premiums and coverage for conversions can be obtained from the program's life insurance carrier, Securian Financial. If you meet the age and service requirements to retire at the time you terminate employment, but delay your retirement, your life insurance remains in effect at no cost. The 25 percent annual reduction in the amount of your coverage begins the January 1 following the first 12 months from the date you separate from service. If you return to work under the same or another covered position, you again become eligible for coverage under group life insurance. The amount of your coverage is based on your new compensation. Any coverage you may have as a result of converting to an individual policy does not offset the amount of your coverage if you are re-employed in a covered position.

A provision of VRS' Group Life Insurance Program offers an additional benefit to you if you should suffer from a terminal illness. This life insurance provision provides an accelerated benefit if you have a terminal illness and are not expected to live longer than 12 months. You may withdraw any amount of your life insurance coverage, up to the entire amount, to use for any purpose. Any amount that remains in the plan would be paid as a benefit to your beneficiary. If you take the entire amount of your life insurance coverage, no benefit would remain for your beneficiary.

In certain limited cases, you may assign the ownership of your life insurance coverage to another person. This is referred to as Voluntary Irrevocable Assignment. Securian Financial can provide you with the details of this benefit.

You may change your beneficiary at any time by requesting a Designation of Beneficiary (VRS-2) from your employer or from Securian Financial. Be sure that your beneficiary understands the benefits under the group life insurance plan. VRS has the authority to recover any possible overpayment of benefits through the proceeds of life insurance coverage.

Keeping your beneficiary designation up-to-date will ensure that benefits are paid promptly and according to your wishes. Any time you have a change of family status such as birth, death, change in marital status or other event, verify your beneficiary designation and complete a new Beneficiary Change Form (VRS-2) if necessary.

If you have basic group life insurance coverage, you are also eligible for additional life insurance coverage for yourself, your spouse and your dependent children through the Optional Life Insurance Plan.

The original Medicare Plan is a fee for service plan that is managed by the Federal Government (Hospital Part A and Medical Part B). It coordinates with your state Medicare plan in the following manner:

• You may go to any physician or supplier who accepts Medicare and who is accepting patients, or to any hospital or other facility.
• You present your Medicare card (red, white and blue) and your Anthem Blue Cross Blue Shield (BCBS) card when you receive health care.
• You pay a set amount (a deductible) towards your health before Medicare pays. Once the deductible is met, Medicare pays its share first as your primary insurer and your state-sponsored insurance pays its negotiated share as your secondary insurer for covered services and supplies. (Read your state Medicare plan handbook to understand what your plan covers.)

No. As a plan participant of the State Retiree Health Benefits Program, once you become eligible for Medicare, regardless of age, you are required to secure both Medicare Part A and Part B and select one of the state Medicare-coordinating plans. If you do not secure both parts of Medicare, you will not receive the full level of benefits from your plan and may have a gap in your coverage.

Yes. You will be required to secure both Part A and Part B and select one of the Medicare-coordinating plans. For membership types in combination with Non-Medicare participant(s) your monthly premium will never exceed the monthly COVA family health insurance premium. You will receive a new plan identification card from Anthem Blue Cross Blue Shield and MEDCO, if applicable.

Note: The MEDCO card is for participants that select a Medicare-coordinating plan that covers prescription drugs. (Plan includes Medicare Part D)

You may want to contact the Benefits Coordination & Recovery Center (BCRC) at 1-855-798-2627 to confirm your employment status is accurate with Medicare.

• If you do not notify Medicare of your change from active employment to retirement or long-term disability status, you may be denied enrollment in Medicare Part D.
• If you are Medicare eligible immediately prior to retirement or the start of long-term disability, be sure to contact Medicare prior to your change in status and make them aware your status is changing.
• If you are Medicare eligible and enrolled in the state plan as an active employee immediately prior to retiring or start of long-term disability, advise Medicare you will be losing creditable coverage as an active employee and will be enrolling in Medicare Part D due to your change in status.
• Under both circumstances: Access to your prescription drug coverage is not available until Express Scripts has received approval from Medicare. Only Medicare can approve your prescription drug coverage. Be sure Medicare is aware of your change in employment status.

Note: Prescription drug enrollment (Medicare Part D) can be a lengthy process. We encourage you to fill prescriptions prior to your date of Medicare eligibility.

When you enroll in a Medicare Plan normally, your monthly health insurance premium will reduce. For rates, see the Department of Human Resource Management's Health Coverage-Medicare Retiree page

You can obtain further information on your state health benefits from the State Administrator's office at the Department of Human Resource Management Retiree Health Insurance page.

The Advantage 65 plans provide an out of country major medical benefit. (See your plan handbook for details.) However, if you live abroad you are not eligible for Medicare Part D. Therefore, the only available plans would be the Advantage 65 Medical only plans.

When at least one of you becomes eligible for Medicare and has to elect a Medicare-coordinating plan, the benefit of the dual contract no longer applies since you will both have single contracts. When one of you moves to a Medicare-coordinating plan, the other (with the waived retiree election) will be automatically changed to a retiree group participant with single membership under his or her own eligibility rights.

The separation of records will ensure that your information reflects a continuous record of individual eligibility for both of you. Each of you will have the premium deducted or billed based on your own monthly Virginia Retirement System (VRS) benefit.

If, at the time of Medicare eligibility, you would like to continue to have both your spouse’s premium and your premium deducted from one monthly VRS benefit, YOU MUST inform VRS of your intent 30 days prior to your Medicare eligibility effective date by submitting a State Health Benefits Program Enrollment Form to:

When you become eligible for Medicare you will have a choice of the following plans:

• Advantage 65 - State plan that supplements the benefits of Medicare.  This plan includes medical coverage administered by Anthem Blue Cross Blue Shield (BCBS) and prescription drug coverage administered by MEDCO.
• Advantage 65 with Dental/Vision – State plan that supplements the benefits of Medicare. Adds dental and vision benefits to Advantage 65.  This plan includes medical, dental and vision coverage administered by Anthem BCBS and prescription drug coverage administered by MEDCO.
• Advantage 65 Medical Only - State plans that supplements the benefits of Medicare. Medical coverage is administered by Anthem BCBS.  This plan does not include prescription drugs.
• Advantage 65 Medical Only with Dental/Vision - Adds dental and vision benefits to Advantage 65 Medical Only.  The medical, dental and vision coverage is administered by Anthem BCBS. This plan does not include prescription drugs.

You will receive a courtesy notification from VRS 45-60 days prior to becoming eligible for Medicare. This notice will explain the Medicare-coordinating plans available through the State Retiree Health Benefits Program.

You can choose one of the Medicare Plans available by completing and submitting the Retiree Enrollment/Waiver form that is enclosed with your notification to VRS with your plan selection or using Employee Direct.

You will be automatically enrolled in the Advantage 65 with dental/vision Medicare-coordinating plan the first day of the month your Medicare is effective, if you do not choose another Medicare plan. You will receive a new membership card from Anthem BCBS within 5-7 days from your enrollment. You will only receive a new MEDCO card, if you were enrolled in dual (retiree +one) or family membership.

You should send a copy of your Medicare ID card to VRS. Without this information, the state will use your Social Security number followed by the letter A for processing. It is important that VRS have the correct Medicare ID number on file, because Medicare verifies it for coverage. If your Medicare ID number is incorrect when you go through the verification process, your state prescription drug benefit will be denied. You will not be able to access your state prescription drug coverage.

Note: Automatic enrollment is based on a participant turning age 65. Participants that are Medicare eligible other than at age 65 will be responsible for changing to a Medicare-coordinating plan at the time of Medicare eligibility. For example: disability retirees may be eligible for Medicare prior to their 65th birthday and therefore, would need to report the Medicare eligibility to VRS.

No. Your prescription drug premium is included with your state-sponsored health insurance coverage if you are enrolled in: Advantage 65 or Advantage 65 with dental/vision. (Option I, Option II and Option II with dental/vision are not available to new plan participants.)

If you want to remain in one of the state Medicare plans and enroll in an alternative Medicare Part D plan, you must change your plan to one of the Advantage 65 Medical Only plans.  You cannot be enrolled in more that one Medicare Part D program at the same time.

You cannot be enrolled in multiple Medicare Part D plans at the same time, therefore; the State Administrator’s office will terminate your state prescription drug coverage and automatically enroll you in one of the Advantage 65 Medical Only plans.

No, if you enroll in one of the state Advantage 65 medical-only plans when you become eligible for Medicare, you will not have another opportunity to enroll.

• A deductible will apply to all covered drugs except generics.
• The cost of the drug is based on the tier (category) of the drug. (Refer to your Formulary, Summary of Benefits and Evidence of Coverage from Express Scripts) or the Express Scripts website.
• Access to your prescription drug coverage is not available until Express Scripts has received an approval from Medicare. Only Medicare can approve your prescription drug coverage. The state plan cannot make any exceptions for participants who have not been approved by Medicare to cover their prescription drugs.

Note: Prescription drug enrollment (Medicare Part D) can be a lengthy process. Consider filling prescriptions prior to your date of Medicare eligibility.

If VRS receives your retirement application 90 days in advance of your retirement date, you will receive your first benefit payment on the first of the month following the month you are last reported to VRS by your employer. For example: If you want to retire on July 1, VRS needs to receive your application no later than April 1. You stop working June 30, but your employer reports your June earnings to VRS in July. Therefore, you will receive your first retirement benefit payment on August 1.

You may not change your retirement payout option if you chose the Basic Benefit or the Partial Lump-sum Option Payment (PLOP). You may change your option under some circumstances if you chose a survivor option. If you chose a survivor option, you may change to the Basic Benefit if:

• your contingent annuitant (the person who would receive your benefit or a portion of your benefit after your death) dies,
• you divorce your contingent annuitant and you have been married fewer than 20 years, or
• you have been married for more than 20 years and have the written consent and proof of good health of your contingent annuitant.

If you change to the basic benefit from a survivor option, you are not allowed to later name another survivor option.

After you retire, you receive Basic Group Life Insurance coverage at no cost to you, provided you meet the eligibility requirements under your retirement plan. Your coverage includes a death benefit and accelerated death benefit.

Your coverage begins to reduce on January 1 following one calendar year of retirement. The reduction rate is 25 percent each January 1 until it reaches 25 percent of the total life insurance benefit value at retirement.

If you have at least 30 years of creditable service, your coverage cannot reduce below $8,000. This minimum will be increased annually based on the VRS Plan 2 cost-of-living adjustment calculation.

Yes. Just fill out the Designation of Beneficiary (VRS-2) and send it to VRS for processing.

You may return to work and continue to receive your retirement benefits if the employer does not participate in VRS. If you return to covered employment, your retirement benefits will stop and you will become an active member. Once you stop working and retire again, VRS will recalculate your benefit to include the additional service and compensation, if higher than your previous compensation. Your benefit is based on the option you chose when you first retired and on the provisions of the plan under which you worked during this second period of VRS-covered employment. The exception to the stipulations above applies to retired teachers who are rehired because of a teacher shortage. They may return to work without interrupting their retirement benefits, provided there is a one-calendar month break in service and the retiree did not leave under a local early retirement program.

Your group life insurance is also based on your compensation during this second period of covered employment, unless your retirement date is on or after July 1, 1999, and you have 20 years or more of service. In this case your life insurance is based on the higher of the coverage amount you would have received had you remained retired or the coverage amount you are eligible for based on your second period of employment.

You will be eligible for a cost-of-living increase the second calendar year after you retire. If you retire on September 1, 2018, for example, you will qualify for an increase on July 1, 2020, with the increase reflected in your August payment. During years of no inflation or deflation, the COLA is 0 percent.

COLA Calculation Under Plan 1
The COLA is calculated using the first 3 percent increase in the CPI-U and half of any additional increase (up to 4 percent), for a maximum COLA of 5 percent.

COLA Calculation Under Plan 2
The COLA is calculated using the first 2 percent increase in the CPI-U and half of any additional increase (up to 2 percent), for a maximum COLA of 3 percent.

View the COLAs that have been granted in recent years.

Direct deposit is automatic for all new retirees. You must fill out an Authorization of Direct Deposit of Monthly Benefit (VRS-57) when you apply for retirement and attach a voided check from your bank or other financial institution. View the Direct Deposit Schedule.

You will receive Social Security benefits in addition to your VRS benefit. Unless you retire due to a disability, your Social Security benefit does not affect your VRS benefit.

Retirement benefits are generally subject to federal and state income taxes. A portion of each benefit payment may be excluded from taxable income if you have funds in the system that were contributed on an after-tax basis. You can have federal and state taxes withheld from your benefit through payroll deduction by completing a Request for Income Tax Withholding form (VRS-15). If you do not file this form, VRS is required by law to withhold taxes from your monthly benefit based on a status of married claiming three allowances for federal and married with zero allowances for state income taxes. VRS will mail you a Yearly Tax Withholding Form (1099-R) each January. If your basic group life insurance is more than $50,000, you will also receive a W-2 form showing the income tax and FICA withheld on the value of that insurance coverage.