Health Insurance Supplements

Do you find the statutes regarding health insurance supplements confusing? Here is a summary of the benefits.

A percentage of the contributions sent to ASRS are placed in a 401(a) Health Benefit Supplement account to provide funds for the health insurance premium benefit. The health insurance premium benefit, which is sometimes called a subsidy or offset, is available to eligible retired and LTD members to help cover the member’s insurance premiums.

To be eligible for the benefit, the member must:

    • Be receiving a retirement or LTD benefit; and
    • Have at least five years of ASRS credited service; and
    • Purchase insurance coverage through a group health insurance plan provided by an ASRS employer or through the ASRS retiree group health insurance program. The group health insurance plan provided must include a medical component and be offered to all retirees and disabled members of that employer.

Different amounts are paid for single and family coverage, for members and covered dependents who are eligible for Medicare (whether or not Medicare coverage was elected) and if the member has between five and ten years or at least ten years of credited service.

ASRS has identified several areas where employers have questions.

Some employers continue collecting the subsidy even after the member is no longer covered. As you can see, this does not meet the above eligibility requirements, even if the employer sends the amounts directly to the retired member.

Some employers continue collecting the subsidy at pre-Medicare rates even after the member or covered dependents have reached age 65.

Employers with eligible covered retired members must inform ASRS with an authorization form to receive the supplement. The employer is also responsible to inform ASRS of any changes, such as adding or removing family members, reaching Medicare age or discontinuing health coverage. Any overpayments must be corrected, and will be collected from the employer.

Written by Rosie Tomforde, Internal Audit Division

This article appeared in "Employer Relations News" (Q1-2018), a digital publication of the ASRS. 

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