Guide to Retirement

Congratulations on your upcoming retirement from Penn State! The Employee Benefits Division would like to provide you with the most current information for a smooth transition into retirement and outline your benefits that you may retain upon your retirement. We have prepared the following resources in an effort to help you understand the benefits you have after retirement, as well as alleviate some of the uncertainty during this important decision-making process. 

Retirement Resources
Retiree Kit 65+ and Medicare Disability Info & Forms Additional Resources
Guide to Retirement Freedom Blue Informational Packet Retiree Summary Plan Document
2017 Rates 2017 Freedom Blue Summary of Benefits Phased Retirement Policy
Frequently Asked Questions Freedom Blue Application Phased Retirement Application
Retiree Programs & Privileges Pre-Filled Social Security Form (for retirees already over the age of 65) Preparing to Retire Presentation
COBRA Rates for Dental and Vision 2017 Highmark Freedom Blue Network Sharing Map to Highmark Office
    Stepping Stones: By Matt Kaplan
Non-Medicare Summary of Benefits
2017 PPO Blue Summary of Benefits
2017 PPO Savings Summary of Benefits

Active employees, also have the ability to utilize Penn State's Employee Assistance Program, HealthAdvocate, to have them help review your specific options.

Medicare Basics Flyer by HealthAdvocate.

Retirement Process:

Step 1:

You will want to start by meeting with a retirement planning specialist from TIAA or SERS to review your income projections and income options. Many facing retirement underestimate their net retirement income by overlooking items currently deducted from their paycheck that will no longer be withheld in retirement.

Taking these withholding items into account can significantly increase your projected spendable income. For instance, in retirement, you will no longer have Social Security and Medicare taxes withheld from your retirement checks.

In addition, the following will not be withheld from your retirement checks:

  • Unemployment Insurance
  • Long-Term Disability (if you currently participate)
  • Parking
  • SERS or TIAA Monthly Contribution
  • Life Insurance (if you currently participate)
  • State & Local Tax

Step 2:

Email the Employee Benefits Division at benefits@psu.edu with your name, PSU ID number and retirement date.  Also, notify your local Human Resources Department as soon as you know you plan to retire.

Step 3:

Review Employee Self Service Information Center (ESSIC) to verify your covered eligible dependents, as well as benefits in which you are currently enrolled to determine if those benefits are applicable after retirement.

You and your eligible dependents are automatically enrolled in the retiree medical plan, if you meet the eligibility requirements to retire with medical benefits.  No additional forms are necessary to enroll, unless you are Medicare eligible.  (See Medical-Medicare Eligible, employees hired prior to January 1, 2010 link below) 

If you wish to refuse medical coverage, you must complete the Retiree Request for Change Form.  Retirees who refuse coverage will not be able to re-enroll at a later date.

Retirees who carry a spouse who will remain actively employed by Penn State, will need to remove their spouse from their benefits.  Spouses will then need to enroll in the Penn State medical plan by completing the Request for Change Form for employee. Employees can obtain this form by emailing benefits@psu.edu. Note: Active spouses can add the retiring employee to dental and vision.

Eligibility - Click in the statement that applies to you

For Employees Hired Prior to January 2010:

  • At least 60 years of age
  • 15 years of continuous full-time service
  • Last 15 years enrolled in a PSU medical plan (immediately preceding retirement)

-OR-

  • Eligible at any age
  • 25 years of regular full-time service
  • Last 10 years enrolled in a PSU medical plan (immediately preceding retirement)

Enrolled either as the primary subscriber or via your spouse's PSU medical plan

As a benefits-eligible, non-Medicare- eligible retiree, what health plan options do I have? 

You have the choice of either the PPO Savings plan or the PPO Blue plan. You may choose to keep the same plan in which you are currently enrolled into retirement, or you have the ability to switch plans at the time you retire. 

As long as YOU, the retiree, are not eligible for Medicare, you could participate in the PPO Savings plan with the Health Savings Account (HSA). Your contributions to the HSA as a retiree will be made either through the Highmark website or directly to Bank of America. The triple-tax savings would be accounted for on your taxes and should be discussed with your accountant/tax advisor. 

If you want to remain in the same plan in which you are currently enrolled as a non-Medicare eligible retiree, you need take no action when you retire. If you want to change plans at that time, please contact the Employee Benefits division at (814) 865-1473 prior to your retirement. 

As a benefits-eligible, and Medicare-eligible retiree, what health plan options do I have?

If you or your spouse are already or will be eligible for Medicare as of 6/30/17, you need to contact your local Social Security office three (3) to four (4) months prior to your retirement. 

You or your spouse will need to be enrolled both parts A and B of Medicare effective the first of the month following your retirement, in order to transition into the Freedom Blue PPO plan through the University.  After you or your spouse are successfully enrolled in parts A and B, you will need to complete a Freedom Blue PPO application.

Please contact the Employee Benefits division at (814) 865-1473 if you have any questions about the process to enroll in Freedom Blue PPO.

Retiring and Over Age 65-Credible Prescription Coverage

If you are over the age of 65, you may receive a letter from the Department of Health and Human Services stating “it appears you did not have prescription drug coverage that met Medicare’s minimum standards.”  The letter goes on to indicate you may be subject to a late enrollment penalty.

If you receive this letter, please complete the form and send it back to Highmark.  They will adjust their records accordingly to ensure they reflect your credible coverage during the time you were enrolled in a Penn State sponsored medical plan.  If you have any questions or concerns, please email benefits@psu.edu

For Employees Hired after January 2010:

  • At least 60 years of age
  • Completed 25 years of continuous full-time service (immediately preceding retirement)

-OR-

  • At least 65 years of age
  • Completed 15 years of continuous full-time service (immediately preceding retirement)

Enrolled either as the primary subscriber or via your spouse's PSU medical plan

Retiree Billing

We have contracted with Lifetime Benefit Solutions to administer, bill, and collect the health care premiums from all of our retirees who have the Penn State medical benefit.

For new retirees, after your local HR unit updates your status from Active to Retiree in IBIS, following your retirement, your retiree medical billing information will automatically be sent to Lifetime Benefit Solutions.  Upon receipt of your information, they will generate your first Retiree Bill and send you all the pertinent information to establish automatic payment withdrawal (ACH).  You are not able to initiate this process until your information is transmitted to Lifetime Benefit Solutions. Your first Retiree Bill should come approximately two to three weeks AFTER your retirement.  Payment is due within 60 days of receipt of your first Retiree Bill.

Going forward, you will be billed on a quarterly basis. Your premium payments are due on the 1st day of each calendar quarter and you will have a 60 day grace period.  Premium due dates are: January 1, April 1, July 1 and October 1; your 60 day grace period will begin on the date after the payment due date.

Coverages - Click Sections to Expand 

Medical-Under 65, employees hired prior to January 2010

If you or your spouse are not Medicare eligible at the time of your retirement and eligible to retire with medical benefits:

  • You have the choice of either the PPO Savings plan or the PPO Blue plan. You may choose to keep the same plan in which you are currently enrolled into retirement, or you have the ability to switch plans at the time you retire.

  • If you want to remain in the same plan in which you are currently enrolled as a non-Medicare eligible retiree, you need take no action when you retire.  If you want to change plans at that time, please contact the Employee Benefits division at (814) 865-1473 prior to your retirement.

  • As long as YOU, the retiree, are not eligible for Medicare, you can participate in the PPO Savings plan with the Health Savings Account (HSA). Your contributions to the HSA as a retiree will be made either through the Highmark website or directly to Bank of America. The triple-tax savings would be accounted for on your taxes and should be discussed with your accountant/tax advisor.

NO FORMS OR ACTION NECESSARY-UNLESS REFUSING COVERAGE or CHANGING MEDICAL PLANS

Medical-Medicare Eligible, employees hired prior to January 2010

If you or your spouse are Medicare eligible at the time of your retirement:

  • Medicare eligible individual(s) must enroll in Medicare Parts A and B to be eligible for medical coverage through the University; contact your local Social Security office to begin this process. The Social Security office will only need the pre-filled Social Security form, CMS-L564E, completed if you are older than 65 years and four months. If you are applying for Social Security three months prior to turning 65, or three months after turning 65, you are considered in your Special Enrollment period and this form is not necessary.
  • A Freedom Blue application form must be completed and returned to the Employee Benefits office prior to your retirement date. Also enclose a copy of your Medicare card that clearly states the effective dates of  Part A and Part B. If you have any question concerning the application form or the plan, call Freedom Blue PPO at 1-866-918-5285
  • When you return your application, your enrollment in the University-sponsored medical plan is complete. You will receive new ID Freedom Blue cards from Highmark Blue Shield.

Forms Needed

Send to

Employee Benefits Division
The Pennsylvania State University
James M Elliott Building
University Park, PA 16802

Retiree Healthcare Savings Account, employees Hired AFTER January 2010

For anyone who was hired after January 2010,  the university will contribute $144 monthly into a Retiree Savings Account, administered by TIAA, to help pay for qualified medical expenses in retirement. Funds can be used to purchase health insurance and other qualified medical expenses for you and your eligible dependents.

Retirement Healthcare Savings Plan Advantages:

  • Money is set aside for your healthcare expenses at retirement while you are working
  • Money accumulated in your account can be used for a variety of healthcare expenses, such as healthcare insurance, co-payments, deductibles and long-term care insurance
  • Healthcare savings plan can be used yourself, spouse and eligible dependents
  • Tax-free growth on any earnings on the contributions Penn State makes on your behalf
  • Tax-free reimbursement of qualified healthcare expenses at retirement
  • On-line access to healthcare savings account, when you meet Penn State’s eligibility retirement qualifications.
  • Check Status of Claims
  • Submit a premium payment to health insurance provider
  • Access health and wellness tools

Retirement Healthcare Savings Plans Fact Sheet

Dental and Vision Options-Available to All Retirees

Option 1:

Although dental and vision coverage is not a benefit provided to Penn State retirees, you may choose to continue either or both of those plans under COBRA. The maximum period of coverage under COBRA is 18 months. Employees eligible for COBRA will receive information and payment premium coupons following their qualifying event directly from Lifetime Benefit Solutions, Penn State's COBRA partner. All questions regarding COBRA benefits after an individual is enrolled in COBRA should be directed to Lifetime Benefit Solutions at 1-800-828-0078.

Option 2:

Retirees can take advantage of a FREE vision discount program available through Davis Vision. Enjoy discounts on eyeglasses, accessories, and examinations. Simply present the card at a participating Davis Vision provider.

Davis Vision discount pricing is abilable to anyone enrolled in a Highmark medical plan. See our guide for how to access the Davis Vision Member Portal.       

Option 3:

Pennsylvania Association of Retired State Employees (PARSE) is available for additional dental and vision benefits after COBRA benefits end, if elected at time of retirement. For more information on PARSE, please visit their website.

Option 4:

If your spouse is an active Penn State employee, they may cover you and eligible dependents under their Dental and Vision plan, which may be more cost effective than electing COBRA. If this is the case, please contact Employee Benefits.

Additional Benefits - All Retirees who meet the years of service requirement (as outlined in Policy HR54)

Life

  • For employees hired on or before April 30, 1954: $10,000 life insurance policy will be provided to you after retirement.

  • For employees hired on or after May 1, 1954: A $5,000 life insurance benefit will be provided to you after retirement at no cost.

Please contact the Employee Benefits Division to review your beneficiary designation, if necessary.

Voluntary Life

Voluntary life insurance (beyond the $5,000 at no cost) will end upon retirement, unless you convert to an individual policy.  You must complete and return the Prudential conversion form within 31 days of your retirement date.

To obtain an application, please contact Prudential at 1-800-778-3827. Please provide the contract number – 35200 when calling.

Long-Term Disability

Long-Term Disability coverage ends upon retirement. However, if you begin working elsewhere after retiring from the University, you may convert your coverage to an individual policy within 31 days following your retirement.

Prudential LTD Conversion Information and Form

Accidental Death and Dismemberment

Accidental Death and Dismemberment (AD&D) coverage will end upon retirement, unless you convert to an individual policy. You must complete and return the conversion form within 31 days of your retirement date to the Hartford address listed on the form.

Contact The Hartford at 877-320-0484 to obtain a conversion form.

Physical Activity Programs

Highmark Blue Shield offers a variety of online programs; non-Medicare eligible retirees can contact Highmark at 800-914-4384 and Medicare-eligible retirees can contact Highmark at 866-918-5285. Their website is also a valuable resource, at highmarkblueshield.com.

Silver Sneakers is one of the nation’s leading exercise programs designed exclusively for older adults. It is a unique physical activity, lifestyle, and social-oriented health and wellness program specifically designed for Medicare-eligible members of all fitness levels. Freedom Blue PPO members receive a complimentary membership at a participating fitness center, plus access to any participating location across the United States. Members have free access to all amenities included with a basic fitness center membership. Members, who live more than 15 miles from a participating center, can still take advantage of the Silver Sneakers Steps self-directed walking and physical activity program. To learn more or to locate a participating provider, visit the SilverSneakers website.

Educational Benefits

Educational privileges are available to retirees able to retire from the University, as outlined in Policy HR54.  The grant-in-aid is for 75% of the tuition charge and applies to Penn State resident instruction and continuing education credit courses (See University Policies HR36 and HR37).

Educational privileges are available to a retiree's spouse and unmarried dependent children. A spouse already receiving educational assistance from the University (such as a graduate assistantship) is not eligible for the grant-in-aid.

A completed Application for Dependent Grant-In-Aid form must be submitted to the Employee Benefits Division in order for the tuition discount to be applied for spouses or unmarried children.  No forms are necessary for retirees.

For additional information or questions regarding retirement, please call the

Benefits Service Center at 814-865-1473 or email benefits@psu.edu.