Planning to Retire: Pending Disability Retirement FAQs
Active Members with pending disability retirement applications awaiting a determination from a State Retirement System are eligible to continue coverage with SHBP for up to six (6) months at the same cost as Active Members. Below are a few of the common questions we receive from Disability Retirees and SHBP Employing Entities.
Who Should I Submit My Premium Payments to While I Wait for the State Retirement System to Approve my Retirement Application Due to a Disability?
If you are an Active Member with a pending retirement application awaiting a determination regarding your eligibility for disability retirement from a State Retirement System, you should submit your premium payments directly to SHBP. Submitting your payments to your employer may cause your coverage to terminate with no right to reinstatement unless you return to work in a benefits eligible position with an SHBP Employing Entity.
Should My Employer Terminate My SHBP Coverage While I Wait for a Determination from the State Retirement System?
Yes, for SHBP purposes, we recommend your Employer terminate your Active Member coverage so SHBP can transition you to Pending Retirement, and place you in a Direct Pay status and directly bill you for your SHBP premiums which are collected by ADP via their subcontractor, WageWorks.
What Happens If My Employer Does Not Terminate My Coverage and My State Retirement System Subsequently Approves my Retirement Due to a Disability?
When a State Retirement System approves your retirement due to a disability, they transmit your New Retiree Record to SHBP with a retroactive retirement date. To ensure their records and SHBP records are consistent, your retirement coverage with SHBP will also be retroactively approved.
This means any premiums you have submitted to your employer during the retroactive retirement period will be automatically refunded to your employer. At the same time, SHBP will directly bill you for all retroactive retiree premiums owed to SHBP. It is your job to ensure you are refunded by your employer for any premiums you’ve paid during the retroactive time period.
For these reasons, SHBP recommends you do not submit premium payments to your Employer but to SHBP directly while you are awaiting the State Retirement System’s approval of your retirement application due to a disability.
Will the State Retirement System Communicate Their Decision on a Retirement Application Due to a Disability to SHBP?
Yes, we are notified via your New Retiree Record transmitted to SHBP by your State Retirement System. This record includes important data such as the date your retirement begins, your years of service as of 1/1/2012, and your total years of service. In many cases, SHBP also receives correspondence from the State Retirement System providing a decision on your retirement application.
How Much Will My Premiums costs during Pending Retirement?
Your premiums will remain at the same rate they were during your coverage as an Active Member for up to 6 months, without any interruption to your coverage.
To learn more about Pending Retirement, please click here.