Post-Retirement Medical Benefits
Last Revised: 7/2015
Responsible University Office: Office of Human Resources
Policy Contact: Donna Steed, 412.396.5041
A. PLAN DESIGN
The minimum requirement for participation in the Duquesne University sponsored Health Reimbursement Account will be the attainment of age 62, while employed on a full-time basis by the University, and 10 years of full-time continuous service with the University. Years of service will be based upon the employee's anniversary date. Partial years of full-time service will be granted on a prorated basis. See TAP NO. 3: Classification of All University Employees for definition of full-time employee.
Credits and Contributions
Duquesne will commit to a fixed number of "retiree credits" to help retirees purchase medical coverage. The number of credits allotted will be reviewed each plan year. A credit is the same as a dollar.
The number of credits will be based upon the retiree's years of full-time continuous service with the University.
Breaks in service - Employees who meet the minimum eligibility (as described above) will have their full-time work for the University count towards this benefit, regardless of any breaks in service which may have occurred. Breaks in service, however, will not be counted as time worked in the formula. For example: An employee, age 62, with 5 full-time years service; left the University for 3 years; then returned for 10 years of continuous full-time service. This employee would be entitled to credit for 15 years of service.
Each year of full-time service earns retiree credits of $3.33 per month during retirement. For example: a retiree with 15 years of full-time service would receive 15 x $3.33 per month, or $49.95 per month in retiree credits for the purchase of medical coverage. A retiree with 15 years and 6 months of full-time service would receive 15 and 6/12 x $3.33 per month, or $51.61 per month in retiree credits.
Each month after retirement, the retiree will receive the number of credits indicated by the formula. These credits may be used to the extent needed for the purchase of medical coverage. Excess credits will accumulate for use in future years.
There is no maximum number of years of service for which credits will be accumulated.
Credits may be used to purchase medical coverage directly from an insurer of the retiree's choice. Credits may not be used for dental or vision premiums.
Medical coverage for eligible dependents may be purchased with excess credits and/or retiree contributions.Retiree contributions will be necessary to pay the difference between the plan cost and the available credits.
Retiree Credit Form
The Benefits Office staff will forward COBRA information (if required), life insurance conversion information, and a Retiree Credit form to the retiree's home address after the retirees final pay processing. The retiree is responsible for completion and return of the Retiree Credit form. The form is used to select the application of their credits (accumulate, COBRA medical premium payment, or establish Health Reimbursement Account.)
If at retirement, the retiree wants to delay the use of credits, (for example, because of coverage by a working spouse, etc.) the delay may be accomplished by indicating "accumulate for future use" on the Retiree Credit Form.
The Benefits Office staff will process the Retiree Credit form and respond with COBRA payment coupons or Health Reimbursement Account instructions as needed.
Health Reimbursement Account (HRA)
Upon request, via the Retiree Credit Form, the University will deposit credits on a quarterly basis into a Health Reimbursement Account (HRA) established in the retiree's name with a third party administrator.
An HRA is an employer-funded, defined contribution employer health benefit plan that reimburses retirees for out-of-pocket health insurance premiums. An HRA is not health insurance. The HRA allows the employer to make contributions to a retiree's account and provide reimbursement for eligible expenses.
Given the provisions of the Patient Protection and Affordable Care Act (PPACA), and since this HRA was established for retirees only, any retiree returning as an employee of the University in any capacity will not be eligible to earn or receive retiree credits into their HRA account during their re-employment period.
Excess credits may be used to purchase medical coverage for dependents. Eligible dependents are defined as:
A spouse enrolled under the group medical program prior to the Duquesne University employee's retirement.
A dependent(s) enrolled under the group medical program prior to the Duquesne employee's retirement.
Death of Retiree
Upon the death of the retiree accumulated credits can be used by an eligible surviving dependent to continue coverage.
If there are no eligible surviving dependents the accumulated credits will be forfeited.
Duquesne University, through the Office of Human Resource Management, will be responsible for the administration of the plan internally or through a third party administrator.
The University, through its Benefits and Budget Committees, will review the credit value to ascertain that the allowances for credits meet the financial objectives of the University, while at the same time addressing the needs of retirees to be able to afford medical coverage.
C. AMENDMENT AND TERMINATION
Duquesne University reserves the right, at its sole discretion, to amend this Plan in whole or in part at any time and from time to time, or to terminate it at any time, without advance notice pursuant to the terms of the plan document. Amendments to the plan are made by the Office of Human Resource Management with the approval of the Vice President for Management and Business. Termination of the plan must be approved by the Vice President for Management and Business and approved by the Executive Committee of the University Board of Directors.