Office of the Vice President for Global Communications

Friday, February 11, 2011

Summary of changes to retiree health care benefits

• The university will make changes that affect both the rules of eligibility to retire with benefits and the amount that the university will contribute toward health care coverage for retirees and their dependents in the future.


Learn more about how the changes affect you

Read the story about changes to retiree health care benefits.

• An online Retirement Health Benefit Estimator has been developed to make it easier to apply the future rules and determine the earliest date of eligibility to retire with benefits.

• The estimator, Q&A's and a detailed summary of the changes can all be found on the Benefits Stewardship website.

• Campus information forums will be held this month in Ann Arbor, Dearborn and Flint. The presentation also will be offered as on-demand video for those unable to attend. Forum dates and times, and information on the video presentation can be found at the Benefits Stewardship website.

• A new point system will determine eligibility to retire beginning in 2013. Once the sum of an employee's age and years of full-time service equals 76, the employee will be eligible to retire with health benefits. Starting in 2015, one point will be added to the eligibility requirement every two years until 2021, when 80 points will required to retire with health benefits.

• The percentage contribution toward retiree health benefits made by the university will begin being gradually reduced starting in 2013. The university will continue to pay a greater percentage contribution toward the coverage of the retiree than the percentage paid for coverage of a dependent.

• Also effective in 2013, the rate of accrual of points toward retirement will change for benefits-eligible part-time employees who will receive 0.8 points toward retirement eligibility for each year of service.

• Newly hired employees starting on Jan. 1, 2013, will continue to be eligible for retiree health benefits once they have the required age and years-of-service points, but the percentage university contribution toward their coverage will be reduced below the level that will be received by current employees when they retire.

• The percentage contribution toward health benefits during retirement will increase in relation to a retiree's number of years of service starting in 2021, with the greatest contribution going to those with 20 or more years of service at the time of retirement. The minimum years of service required to receive a contribution toward retiree health benefits will be 10.