Office of the Vice President for Global Communications

Tuesday, September 4, 2012

Retirement eligibility, benefits changes in place starting Jan. 1

Chris Miller took her own advice, and it's paying off.

For 15 years, Miller led retirement planning seminars for university employees where she outlined how to best navigate the years before and after leaving the work force.


2013 benefits plan rates are online

Individualized 2013 benefits plan rates are available now through Wolverine Access. Under the Faculty & Staff tab, click on Employee Self-Service then Benefits.
The 2012 and 2013 rates are displayed so faculty, staff, and retirees can compare as they plan for Open Enrollment, taking place Oct. 22 through Nov. 2.
Open Enrollment is the annual opportunity to review current benefits and make new choices for the next calendar year.

What's New for 2013

• The Affordable Care Act expands the list of covered preventative services. According to the patient's age, gender, and health status, copayments, deductibles and coinsurance may be waived for certain preventative services. To find out which preventative services have been added, go to

• The Health Care Flexible Spending Account limit will change. New legislation from the Affordable Care Act goes into effect for 2013 that will reduce the annual Health Care Flexible Spending Account contribution limit from $6,000 to $2,500.

For more information go to the Benefits Office website.

She left her position as a benefits specialist on June 1 after 20 years at U-M. With changes in retirement eligibility and retirement benefits at the university as of Jan. 1, 2013, Miller says it's more important than ever to make informed decisions.

As for her own retirement, she stuck to the outline she's presented for years.

"I followed it to the T," she says.

Retirement requires planning, and employees should work to understand the upcoming changes and look up their eligibility status on Wolverine Access.

Miller says it pays for employees to set goals and track their retirement eligibility, and she offered three examples of how looking ahead helped her transition:

• Understand how retiree benefits work. Retirees can't add new dependents to their coverage. So Miller added her husband to her plan during open enrollment before she left U-M. "I'm really happy that I included my husband in that last open enrollment," Miller says. "We had him on there those last six months."

• Let financial advisers and doctors know you're retired. Miller says physicians want to know more about you than health issues. They want to know where you are in life. "(Retirement is) something they want to know when they ask, 'Has anything changed since we last talked?' They're looking at Medicare. It's another person on your team watching out for you."

• Stay in touch. "I've said it for years, but you don't realize how much you miss the people from work. It's so easy to use email to stay in touch, receive news."

The upcoming gradual implementation of changes to U-M retiree health benefits, first announced in February 2011, allow the university to remain market competitive in terms of benefits. The gradual shift means the greatest impact will be on future employees.

These changes eventually will result in recurring annual savings of more than $9 million by 2020 and $165 million by 2040.

Other key points to know about the 2013 changes:

• 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 be required to retire with health benefits.

• The percentage contribution toward retiree health benefits made by the university gradually will be 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 point 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.

• Beginning in 2021, retirees with less than 20 years of service will have a reduced university contribution towards retiree health benefits. 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.

An online Retirement Health Benefit Estimator can help determine the earliest date of eligibility to retire with benefits. The estimator can be found under the Faculty & Staff tab of Wolverine Access by selecting the Benefits section of Employee Self-Service.