Pending Retirement FAQs
When an Employer terminates Active Members due to retirement they are placed in a “Pending Retiree” status and are no longer Active Members in the SHBP Enrollment Portal. The following FAQs address commonly asked questions regarding the transition of Active Members into retirement.
Who should Pending Retirees/Retirees contact if they have questions about retirement?
SHBP Member Services is the initial and primary point of contact for Pending Retirees and Retirees and may be contacted via email at SHBPservicecenter@adp.com or by phone at 800-610-1863. If SHBP Member Services call center representatives are unable to resolve a Pending Retiree’s or Retiree’s inquiry, the inquiry is assigned a ticket number and escalated to a Tier 2 team member. If the Tier 2 team member is unable to resolve or requires assistance with a Pending Retiree’s or Retiree’s inquiry, the inquiry is escalated directly to an internal SHBP Member Services Specialist for resolution.
Why does SHBP have a Pending Retirement Process?
We are required to have a process for Pending Retirees pursuant to Section 111-4-1-.07(2) of the State Rules and Regulations for the SHBP.
What happens when an Employer terminates Active Members covered by SHBP due to retirement?
1. If an Employer terminates an Active Member due to retirement, SHBP will treat that terminated Active Member as a Pending Retiree, instead of terminating their coverage immediately. This provides time for the terminated Active Member to be transmitted on a retirement file to SHBP. The terminated Active Member is moved from the Active participation group to the Pending Retiree participation group but their Payroll Location will not change. Although the terminated Active Member remains in the same Employer Payroll Location, the Employer is not responsible for the Employer Contribution (including premium) for the terminated Active Member after the first of the month following the last day covered. For example, if an Active Member’s Date of Last Deduction is 6/30/2020, coverage as an Active Member ends with their Employer on 7/31/2020, and on 8/1/2020 the terminated Active Member is considered a Pending Retiree and the Employer is no longer financially responsible for Employer Contributions (including premiums).
2. During the time of Pending Retirement if SHBP receives a terminated Active Member’s information on a retirement file from a State retirement system (e.g., ERS or TRS), the terminated Active Member is automatically transferred to their applicable SHBP retirement payroll location (and they are no longer in the Employer’s Payroll Location) and they change from a Pending Retiree to a Retiree (Note: ERS, TRS, PSERS, LRS, JRS are setup as Payroll Locations within SHBP the same as Employer Payroll Locations)
a. If SHBP does not immediately receive a terminated Active Member’s record from a State retirement system, they can remain in a Pending Retirement status for up to six months.
b. If these terminated Active Members are not transmitted on a retirement file to SHBP within six months, they will be removed from the Employer’s Payroll Location. Then SHBP will terminate the Active Members’ coverage, and they will only be eligible for federal COBRA coverage or State Extended Coverage, as applicable.
What happens if an Active Member notifies their Employer that they are retiring, and the Employer mistakenly terminates the Active Member without indicating the Active Member is a Retiree?
1. The terminated Active Member’s coverage is terminated on the last day of the following month after their Date of Last Deduction (e.g., Date of Last Deduction is May 20, coverage ends June 30).
2. If the terminated Active Member is subsequently sent on a retirement file from a State retirement system within 90 days, their coverage will be reinstated as a Retiree and continue from when they were an Active Member to avoid any lapse in coverage because per SHBP rules, a Retiree cannot have a lapse in coverage between Active Member status and Retiree status. The Retiree will also be placed on Direct Pay status, which means SHBP will bill the Retiree directly via ADP’s subcontractor (Wageworks) to ensure SHBP is paid for any missed premiums.
3. If the terminated Active Member is sent on a retiree file from a State retirement system after 90 days, the terminated Active Member is only eligible for federal COBRA coverage or State Extended Coverage, as applicable.
How can an Employer help an Active Member that it mistakenly terminated without indicating the Active Member was a “Retiree?”
The Employer should immediately contact SHBP Employer Services to request further guidance from their dedicated employer services specialist.