We have received several questions from members regarding the subsidized health insurance for certain Defined Contribution plan retirees. Here are the Top 5 questions with answers. If you want to confirm your retirement eligibility, please call Office of Retirement Services (ORS) 800-381-5111 or you can login to your miAccount and you use the Message Board to speak directly with an ORS customer representative.
If you have additional questions, contact Tara Nichol with MCO Member Benefits at 517-485-3310 ext. 150.
Graded Premium Subsidy Retirement FAQs
(Current as of December 2017)
1. What is Graded Premium Subsidy?
The graded premium subsidy (i.e. subsided healthcare) is where the State will pay a percentage of your monthly health, prescription drug, dental, and vision premiums during retirement. The current percentage the State will pay is 30% after 10 years of state service, with an additional 3% for each year of service after that up to the maximum subsidy in place for active employees.
2. Who qualifies for Graded Premium Subsidy?
There are two qualifications:
a. You must have started state service between March 31, 1997 and December 31, 2011.
b. You must meet the age and service requirement for retirement. Corrections officers are covered employees and have two sets of retirement eligibility (51 after 25 years of service or 56 after 10 years of service).
Also, your eligible dependents may enroll after you leave state service as long as
you are eligible and remain enrolled.
3. How is the 3% per year calculated?
The current percentage the State will pay is 30% after 10 years of state service, with an additional 3% for each year of service after that up to the maximum subsidy in place for active employees. To confirm your specific percentage, you should contact Office of Retirement Services directly.
4. What happens once I am Medicare eligible?
Your graded premium subsidy percentage stays the same. The amount you pay will be recalculated to reflect your Medicare supplemental premium amount.
5. How do I enroll in the Graded Premium Subsidy?
At least 3 months before you retire, contact the Office of Retirement Services (ORS) 800-381-5111 and request a Defined Contribution insurance packet. This packet will contain all the forms and information you will need. Once you submit the forms to ORS, you will receive a letter stating your eligibility and subsidy amount.