The Retirement Process

Retiree Checklist - Pre-Medicare
Retiree Checklist - Medicare
Eligibility to Continue Insurance
Dependent Coverage
Decreasing/Dropping Coverage
Premium Payment Options
More Information for Assisting Retirees

Retiree Checklist - Pre-Medicare 

Encourage the retiring employee to attend a Pre-Retirement Meeting.  (See Pre-Retirement Meeting Schedule)
Have the employee review the “Planning for Retirement” section of the OSEEGIB website.
Confirm the employee has the required number of years of creditable service.
Give the employee an Application for Retiree/Vested/Non-Vest/Defer Insurance Coverage form.
Instruct the employee that they can keep, add, or drop health, dental, and/or vision coverage at retirement. Employees cannot change plans until the next annual Option Period unless they are moving out of the HMO ZIP Code service area.
Inform the employee of the option to continue life insurance.

• Life insurance cannot be added or increased at retirement
• Premiums are different for former employees
• Suggest the employee review their beneficiary designation and remind them beneficiaries can be changed at any time by submitting a new Beneficiary Designation Form

Instruct the employee to complete the Application for Retiree/Vested/Non-Vest/Defer Insurance Coverage form and return it to OSEEGIB at least within 30 days of termination of service. Remind them that while they have a 30-day window to complete the form, it is best to complete it as soon as possible to prevent any delay. The form can also be faxed to Accounting Retirement at 1-405-717-8939 or 1-405-717-8942.
Inform the employee that you are required to send a COBRA packet and to disregard it if they are continuing insurance as a former employee.

Retiree Checklist - Medicare

Encourage the retiring employee to attend a Pre-Retirement Meeting.  (See Pre-Retirement Meeting Schedule)
Confirm with the retirement system the employee has the required creditable years of service.
Obtain an Application for Retiree/Vested/Non-Vest/Defer Insurance Coverage form.
Give the employee an Application for Medicare Supplement With Part D for the covered employee or dependent enrolled in a HealthChoice or UnitedHealthcare plan.
If the member or covered dependents are enrolling in a Medicare Advantage Prescription Drug (MA-PD) Plan, they must also contact their current health plan directly to get an MA-PD application.
Remind the Medicare eligible member and/or covered dependents that they must be enrolled in Medicare Part A and Part B. To confirm Medicare coverage, they can contact Social Security toll-free at 1-800-772-1213.
If the member and/or their covered dependents have delayed enrollment in Medicare Part B, they must contact the Social Security administration office to begin Part B coverage.
Instruct the employee that they can keep, add, or drop health, dental and/or vision coverage at retirement. Employees cannot change plans until the next annual Option Period unless they are moving out of their HMO ZIP Code service area.
Inform the employee of the option to continue life insurance.

• Life insurance cannot be added or increased at retirement
• Premiums are different for former employees
• Suggest the employee review their beneficiary designation and remind them beneficiaries can be changed at any time by submitting a new Beneficiary Designation Form

Instruct the retiring employee to complete the application forms and return them to OSEEGIB at least within 30 days of termination of service.
Inform the employee that you are required to send a COBRA packet and to disregard it if they are continuing insurance as a former employee.

Retirement Terms

Following are the terms used to describe employees who are eligible to continue insurance as a retiree, vested, non-vest, defer, or COBRA member:

• Former Employee – An employee who keeps insurance, but is not currently employed by an OSEEGIB participating employer.
• Retiree – An employee who worked long enough to retire, draw a retirement check, and keep insurance benefits.
• Vested – An employee who has worked long enough to keep benefits, and has contributed to a retirement system, but who is not ready to retire.
• Non-Vest – An employee who has worked long enough to keep benefits, but did not contribute to a retirement system, or has withdrawn all retirement contributions and no longer qualifies for retiree or vested status.
• Defer – A retired or vested member who chooses to transfer their primary status medical, dental, and/or vision insurance to dependent status on their spouse’s current insurance through OSEEGIB. Life insurance must be kept in the member’s account; it cannot be deferred to a spouse’s account.
• COBRA – An employee who is not eligible to vest or retire, but can continue coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Be aware that a retiree, vested, or non-vest employee who elects COBRA instead of retiree/vested/non-vest insurance is not eligible to switch back to a retiree/vested/non-vest account at the end of the COBRA continuation period. By electing COBRA, the employee forfeits their right to continue insurance as a retiree/vested/non-vest member. When COBRA eligibility ends, the employee's eligibility to continue coverage through OSEEGIB ends.

Note: There is no individual conversion option through OSEEGIB.

Eligibility to Continue Insurance 

Eligibility to continue insurance through OSEEGIB as a former employee is defined by Oklahoma Statutes, and certain requirements must be met, including:

• The employer must continue to participate in the plans offered through OSEEGIB.
• The employee must reach the required years of service to continue coverage.

The years of creditable service required to continue coverage as a retiree, vested, or non-vest are:

• Teachers’ Retirement System (TRS) – Education employees need ten years of creditable service to retire or vest insurance benefits.  (See 74 O.S. § 1316.3)
• Oklahoma Public Employees Retirement System (OPERS) – State and Local Government employees need eight years of creditable service to retire or vest insurance benefits.  (See 74 O.S. § 1316.2)
• Other or no retirement system – The required number of years of creditable service are determined by the classification of the employing entity. Employees of an entity classified as an “Education Entity” need ten years of full-time employment to qualify for non-vest insurance benefits. Employees of an entity classified as a “State or Local Government Entity” need eight years of full-time employment to qualify for non-vest benefits.

To find out if an employee has enough years of creditable service to retire or vest, contact the appropriate retirement system. The total years of creditable service do not need to be continuous or even with the same employer; however, years of service must be with the same retirement system.

While TRS allows education employees to vest retirement benefits after five years of service, the statutes governing OSEEGIB and the vesting of insurance benefits are different. Oklahoma Statutes define the time required for education employees to vest insurance benefits as ten years of creditable service.  (See 74 O.S. § 1316.3)  For questions regarding a part-time employee’s eligibility to retire and credited years of work, contact TRS.

When an employee retires, they and their eligible dependents can begin or continue health, dental, and/or vision coverage as long as your employer participates in those benefits through OSEEGIB, and the employee enrolls within 30 days of termination of employment. Life insurance must be in effect before the termination of employment. Life insurance can be continued at retirement, but it cannot be added.  (See 74 O.S. § 1316.2, 1316.3. and 1315E.2)

Deferring Coverage

When an employee’s spouse also works for an OSEEGIB participating employer, the employee can defer (transfer) primary coverage to the spouse’s account as a dependent. The spouse must complete an Insurance Change Form through their employer to add the member as a covered spouse. Consideration should be given to the differences in premiums and any employer or retirement system contributions paid toward insurance. The member can return to retiree status upon the spouse’s retirement, with another qualifying event, at the annual Option Period, or when they become Medicare eligible. Coverage through OSEEGIB must have been continuous.  (See OSEEGIB Rules 360:10-3-20)

Life insurance cannot be deferred and must be carried in the retiree’s own account.

Dependent Coverage 

An employee can elect to begin or continue coverage for their spouse and/or other eligible dependents at retirement.

They can also choose to exclude their spouse. Their spouse must sign the Spouse Exclusion Certification section of the Application for Retiree/Vested/Non-Vest/Defer Insurance Coverage form.

If an employee elects to continue coverage for their eligible dependent children, all eligible dependents up to age 26 must be covered; however, the employee can choose to exclude dependents from coverage if they have other group coverage, such as other employer benefits, Medicare, Medicaid, or other group entity, or are eligible for Indian or military benefits. An employee can also choose to exclude dependents who do not reside with them, are married, or are not financially dependent on them for support.

Dependents cannot be added after retirement unless one of the following qualifying events occurs:

• Birth of a child
• The employee’s spouse or dependents under age 26 lose other group coverage
• The member marries
• The member adopts or gains legal guardianship of a child under age 26

A new spouse and any eligible dependents must be added within 30 days of the qualifying event.

A spouse or other dependents can never be added at a later date unless a qualifying event occurs.

For additional information regarding eligibility, refer to the Eligibility section.

Decreasing/Dropping Coverage 

If an employee chooses to decrease or drop coverage, you should make them aware that they cannot regain that coverage at a later date and may forfeit any contribution made toward health insurance by their retirement system.

Premium Payment Options 

Premium Payment Options are listed on the second page of the Application for Retiree/Vested/Non-Vest/Defer Insurance Coverage form.

A retiree can elect to have premiums deducted from their retirement check or be billed directly:

• Premiums paid through retirement benefits are deducted from the retirement check prior to deposit in the retiree’s financial institution. Advise the employee that the retirement system pays at the end of the month (or in arrears).
• Premiums that are billed directly can be paid by automatic bank draft, check, or money order.

Any contribution toward health insurance premiums from a retirement system applies regardless of the payment method.

More Information for Assisting Retirees 

If a Medicare eligible former employee returns to work, they can elect your employer’s group health plan or continue insurance as a former employee.

• If an employee enrolls in the group health coverage offered by your employer, they must contact Medicare before the new coverage begins. They will also need to contact Medicare when they terminate their employment.
• If an employee chooses to continue insurance as a former employee, Medicare will continue to be the primary payer.

Completing the Application for Retiree/Vested/Non-Vest/Defer Insurance Coverage

Click here for the Application for Retiree/Vested/Non-Vest/Defer Insurance Coverage form.

Be aware that when an employee opts out of their employer-sponsored group health insurance in retirement, their retirement system contribution toward health insurance is lost, and it cannot be paid to another insurance company or toward dental, vision, or life insurance.

Terminating Employee Coverage

When an employee leaves active employment, you must terminate the current employee account:

• Web Enrollment System users must terminate the employee’s account effective the last day of the month of employment or contract end date.
• If you do not use web enrollment, you must complete an Insurance Termination Form and fax or mail it to OSEEGIB during the last month of employment.

For education employers, the length of an employee’s contract must be considered when determining the last day of insurance coverage. While the employee may be able to retire or vest in April or May, their employment contract might continue through July, August, or September. When this occurs, the employee’s insurance coverage must continue through the last month of the employment contract.

Note: It is very important that each employee understands their options to continue insurance upon termination. Failure to continue insurance when leaving  employment results in the loss of eligibility. Late enrollment is not available.

Enrollment in Medicare

When a current employee becomes Medicare eligible, they have two options. They can:

• Continue coverage through your employer’s group health plan and defer Medicare Part B enrollment. The employer’s plan will remain the primary payer.
• Discontinue coverage through your employer’s group health plan. Medicare becomes the primary payer for Medicare-covered services. An employer cannot provide a Medicare supplemental plan, or pay a subsidy for such coverage.

Note: When a former employee becomes eligible for Medicare, they are notified by the Social Security Administration and automatically enrolled in Medicare Part A with the option to enroll in Medicare Part B. OSEEGIB strongly recommends that all eligible former employees enroll in Medicare Part B. All Medicare plans offered through OSEEGIB are based on enrollment in Medicare Part A and Part B.

About two months before their 65th birthday, OSEEGIB notifies each former employee of their options, including information about how to enroll in a Medicare supplement or MA-PD plan.

If a former employee is under age 65 and becomes Medicare eligible, they must notify OSEEGIB as soon as possible. At that time, OSEEGIB provides information about how to enroll in a Medicare supplement or MA-PD plan.

Additional Information

Retirement is not a qualifying event that allows a change in plans; however, if an employee moves out of their plan’s service area, a plan change is allowed. In all other cases, an employee must wait until the annual Option Period to change plans.

Anyone considering retirement can get more information by attending one of the Pre-Retirement Seminars offered by OSEEGIB. These seminars are held throughout Oklahoma and are designed to provide important information about retirement and insurance. You are also encouraged to attend at least one of the seminars.

Questions concerning retirement benefits or contributions toward health insurance premiums should be directed to the appropriate retirement system.

In the event your employer terminates coverage through OSEEGIB, Oklahoma Statutes dictate if an employee can continue coverage through OSEEGIB or if they must follow your group to its new insurance carrier.

• Common school or career tech employees who retired before May 1, 1993, can continue with OSEEGIB if their employer elects another insurance carrier. If the retirement date was on or after May 1, 1993, all eligible former employees must follow their former employer to the new insurance carrier.  (See 70 O.S. § 5-117.5)
• County and local government employees who retired before January 1, 2002, can continue coverage with OSEEGIB if their former employer elects another insurance carrier. If the retirement date was on or after January 1, 2002, all eligible former employees must follow their former employer to the new insurance carrier.  (See 74 O.S. §. 1315 (H)(I))
• Higher education and charter school employees must follow their most recent employer to the new insurance carrier regardless of the retirement date.  (See 74 O.S. § 1308.1)
• Groups that joined OSEEGIB after the dates listed above must take all retirees with them if they leave OSEEGIB in the future.

If your employer offers a benefit through another carrier, a retiring employee is not eligible to add or continue that benefit through OSEEGIB.  (See OSEEGIB Rules 360:10-3-20)

Contact Information for the Retirement Process