How to handle health insurance deductions for employees who are retiring at the end of the school year
Is your school district one of the districts that participate in the Group Insurance Commission's RMT program? If:
- YES, then you should withhold premiums for any partial month and two full months following the employee’s retirement date, because the GIC begins coverage on the first day of the third full month of retirement.
For example, if the employee is retiring on 6/30/13, then you should withhold premiums through August 30, 2013. The employee would then stay with your district's group insurance program for July and August, and the GIC will pick up coverage as of September 1st. Likewise, if the employee is retiring on 7/15/13, then you should withhold premiums through September 30, 2013; in this case, the employee would stay with your district’s group insurance program through July, August and September, and the GIC will pick up coverage as of October 1st.
- NO, then you should treat the employee as if he or she would be returning to school the next year, and withhold his or her premiums as you would normally do from the employee’s (school) year-end payday or summer pays, so that his or her insurance is paid up through the month of September.
Then, in September, the insurance coordinator for your city/town/regional district can instruct us to begin insurance premium withholdings for the new retiree's October premium; the retiree’s October insurance premium will be withheld from the retiree’s MTRS retirement payment that is processed at the end of September.