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Unused Sick Leave at Retirement

May 9, 2018, 09:18 AM by MOSERS

I know any sick leave balance you have at retirement can go toward years served. I also know that if you have 26 years of service with the state at retirement, the state will pay 65% of your insurance premium. I have approximately 1700 hours of sick leave. Will that time count toward the years of service for the 65% reduction of my insurance premiums?

Yes. You will get one month of credited service for each 168 hours of unused sick leave you have at retirement. If you have 1700 hours of unused sick leave, you will get 10 additional months of credited service. (This service does not count toward eligibility for retirement but will increase the amount of your pension benefit payments.) MOSERS will report your actual service plus any additional service for unused sick leave to MCHCP. Note below, that their calculation for the subsidy is based on FULL years of service.

Here is additional information from the MCHCP website:

The retiree premium is based on years of service with the state at retirement. The state contribution is calculated by using the number of full years of service as reported by MOSERS or another retirement system multiplied by 2.5 percent. The contribution for non-Medicare retirees is based on the PPO 600 Plan premium with the tobacco-free incentive and wellness premium. The contribution for Medicare retirees is based on the PPO 600 Plan total premium. The maximum state contribution cannot exceed 65 percent.

Employees whose premiums are collected pre-tax through the cafeteria plan have the opportunity to pre-pay premiums pre-tax as a retiree. Prepaid premiums may only be paid within the same calendar year*. To prepay, retirees must submit their enrollment request at least 31 days prior to their retirement date. The first month’s premium for retiree coverage will be divided between the last two active paychecks. Additional prepaid premiums may be collected from the retiree’s last two active paychecks and/or lump sum vacation/compensatory time payroll. Verify this payroll amount with the HR/Payroll personnel to determine how many months of retiree premiums can be prepaid.

* Employees with a retirement date of Dec. 1 cannot prepay premiums, since future premiums would be for a different plan year. Employees with a retirement date of Jan. 1 can only prepay premiums using funds from their final active payroll (usually Jan. 15) and/or their vacation and compensatory time payroll.

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We strive to provide the most accurate information possible in our answers to Rumor Central questions. However, occasionally, laws, policies or provisions change and individual circumstances may vary. Please contact a MOSERS benefit counselor or see the handbooks in our website Library for more detailed information. If there is any difference between the information provided in this blog or on the MOSERS website and the law or policies that govern MOSERS, the law and policies will prevail. See our Privacy, Security & Legal Notices for more information.