Pending Retirement FAQs
When an Employer terminates Active Employees due to retirement they are placed in a “Pending Retiree” status and are no longer Active Employees in the ADP system. The following FAQs address commonly asked questions regarding the transition of Active Employees into Retirement.
Who should Pending Retirees/Retirees contact if they have questions about Retirement?
The SHBP Member Services call center is the initial and primary point of contact for Pending Retirees and Retirees. If State Health Benefit Plan (SHBP) Member Services call center representatives are unable to answer a Pending Retiree’s or Retiree’s question(s), those questions are assigned a ticket number and escalated to a Tier 2 call center representative. If the Tier 2 call center representative is unable to answer a Pending Retiree’s or Retiree’s question(s), the call 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 Employees covered by SHBP due to retirement?
1. If an Employer terminates an employee due to retirement, SHBP will treat that employee as a Pending Retiree, instead of terminating their coverage immediately. This provides time for the terminated employee to be transmitted on a retirement file to SHBP. The terminated employee is moved from the Active participation group to the Pending Retiree participation group but the payroll location number will not change. Although the terminated employee remains in the same Employer payroll location, the Employer is not responsible for premium billing for the terminated employee after the first of the month following the last day covered (e.g., Date of Last Deduction is 6/30/2017, active coverage ends under Employer 7/31/2017, and on 8/1/2017 the terminated employee is considered a Pending Retiree).
2. During the time of Pending Retirement if SHBP receives a terminated employee’s information on a retirement file from a State retirement system (e.g., ERS or TRS), the terminated employee is automatically transferred to their applicable SHBP retirement 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 similar to active payroll locations).
a. If SHBP does not immediately receive a terminated employee’s record from a State retirement system, they can remain in a Pending Retirement status for up to six (6) months.
b. If these terminated employees are not transmitted on a retirement file to SHBP within 6 months, they will be removed from the Employer’s payroll location. Then SHBP will terminate the employees’ coverage, and they will only be eligible for federal COBRA coverage or State Extended Coverage.
What happens if an Employee notifies their Employer that they are retiring, and the Employer mistakenly terminates the Employee without indicating the Employee is a Retiree?
1. The terminated employee’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, Active coverage ends June 30).
2. If the terminated employee 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 employee.
3. If the terminated employee is sent on a retiree file from a State retirement system after 90 days, the terminated employee is only eligible for federal COBRA coverage or State Extended Coverage (i.e., unsubsidized coverage at the full costs).
How can an Employer help an Employee that it mistakenly terminated without indicating the Employee was a “Retiree?”
1. Update the terminated employee’s status on an AUF File as a New Hire record and insert all the information necessary for a New Hire. On that same file, update the employee’s status with a Retirement record and insert all the information necessary for a Retiree; or
2. Follow the Discrepancy Process.