New policy allows one-time health payments for some retirees

Employees must meet eligibility guidelines to qualify

Employees who want to retire but are not yet eligible for Medicare may be able to receive a one-time payment for health care costs, thanks to a policy passed by the Kansas Board of Regents.

The Limited Retirement Health Care Bridge Policy will allow qualified faculty, unclassified professional staff and university support staff to receive a lump sum payment at retirement for the purpose of paying health care costs. The policy was passed by the regents in January and is being implemented at KU.

The policy applies to employees who are retirement eligible, at least 55 years old and have at least 10 years of full-time service to the university but are not yet eligible for Medicare. Employees whose salaries are grant funded or those who are taking part in the phased retirement program will not be eligible.

“It is a policy we feel will be rarely utilized,” said Ola Faucher, director of Human Resources and Equal Opportunity. “The employee’s department will be required to make the payment, and it is subject to tax.”

Eligibility for the policy will be determined on a case-by-case basis. Employees must have announced their retirement and had it accepted by the university. The request must first be approved by the department head, and then by the appropriate vice provost. The provost will make the final decision whether participation in the program is in the best interest of the university. If approved, General Counsel will draft an arrangement between the university and employee.

The payroll office will determine the amount of the payment, based on the employee’s salary and benefits. It will not be more than three times the maximum annual retiree medical plan premium for an employee, spouse and children under the State Health Care Benefits Program during the year the request is filed and the amount necessary to cover the associated employee fringe benefit costs. The amount will be subject to review and can be modified at each stage of the review process.

The policy is available online. The Kansas Board of Regents policy is available online.