Retiree Benefits

If you did not enroll in a medical plan at retirement, then you may only enroll when obtaining Medicare eligibility (usually at age 65).

If you are an early retiree or have a dependent who becomes Medicare eligible and wish to remain on a Los Rios sponsored plan, then contact the Employee Benefits Department two to three months prior to your Medicare effective date.

The Employee Benefits Department will review your insurance options and provide you all the required paperwork for your transition to a Medicare plan. Do not complete paperwork sent to you directly from a carrier. If you complete and return their application, it may result in the loss of your Los Rios coverage and placement in an individual plan.

Original enrollment forms for the Medicare plan must be received by the Employee Benefits Department before the last working day of the month prior to your Medicare effective date. For example: if your Medicare is effective November 1, 2021, forms must be received no later than October 31, 2021.

Carriers cannot retroactively enroll you in a Medicare plan due to Center for Medicare and Medicaid Services (CMS) guidelines. Late paperwork may result in a significantly higher insurance premium being assessed for each month you are Medicare eligible but are not enrolled in a Medicare plan.

You can enroll in or make changes to your benefits each year during open enrollment (normally held in the fall) for benefits effective January 1 through December 31.

Your benefits elections will remain in effect throughout the plan year unless you experience a change in status that affects eligibility for benefits or another qualified status change event (in accordance with Internal Revenue Code rules).

You must request an election change and submit associated forms to the Employee Benefits Department within 31 days. Examples of qualified status change events include (but are not limited to) a change in:

• Marital status, including marriage, death of a spouse, divorce, annulment, or legal separation
• Domestic partnership status, including establishment or termination of the partnership
• Number of your eligible children, including by birth, adoption, placement for adoption, or death
• Eligibility status of your children (for example, due to age)

You do not have to enroll in Medicare at age 65 if you are covered by a Los Rios health plan. Enrolling in Part A is fine, since it is premium-free. You can "defer" Part B until you retire, avoiding Part B premiums until that time.

When you retire, the Employee Benefits Department will complete a Social Security Employment Verification form, which will verify your coverage in an employer health plan. This will waive any penalties for late enrollment and give you a "Special Enrollment" period to enroll in Medicare.

If you are collecting Social Security Benefits, then Medicare will automatically enroll you at age 65. You will receive a Medicare Card in the mail with instructions to keep the card if you wish to be enrolled in Medicare. If you do not want Medicare, you must sign the document and return it to Social Security.

If you are not collecting Social Security Benefits, then you can contact Medicare and notify them of your decision to defer.

If you do not enroll in Medicare, then you cannot enroll in a Medicare Supplement/Advantage Plan. This could have a significant impact on your insurance premiums. If you decide to enroll in Medicare at a later date, Medicare could be assessed penalties for late enrollment. The penalty is 10% for each 12 month period you were eligible for Part B but didn’t enroll (for example: if you wait 3 years, then you will have a 30% penalty). This is a lifetime penalty.

You need to verify with that employer whether or not they require Medicare enrollment at age 65.

All Los Rios sponsored plans have prescription drug coverage. If you enroll in a separate drug plan, then you will jeopardize your Los Rios sponsored health plan. If you are being charged income-related monthly adjustment amount (IRMAA) for Part B, then you will also have IRMAA for Part D that you must pay.

Your money is always 100% yours and can be left where it is or rolled into an IRA or to your new retirement plan when you leave employment. If you withdraw your money, taxes will be due on the distribution. In most cases, withdrawal can be made without incurring an IRS penalty if you retire at 55 (or later) or if you become disabled. If you retire before age 55, you may be eligible to receive a series of periodic payments. There are several options:

• Transfer the money into your new employer’s retirement savings plan
• Roll it into an IRA
• Leave it where it is
• Take a lump sum payment (penalties, taxes and other fees may apply)

To withdraw funds, obtain the distribution form from your investment company, complete an Envoy Transaction Request Form, and fax (or mail) both forms to Envoy. Envoy will sign the investment company’s form on behalf of Los Rios, and will send it back to them to process the distribution. Just like life insurance, when you open your retirement savings plan, you designate a beneficiary. Be sure to keep your beneficiary up-to-date. Contact Envoy or the Employee Benefits Department if you have any questions or need additional details.

The following does not apply to LRCFT retirees.

Employees who retire may not:

• Use their vacation to extend out their retirement date
• Convert their accrued vacation leave to service credit

Vacation hours for retirees aged 55 and older are paid into the Special Pay Plan, which is a 403(b) retirement plan for special forms of compensation paid to employees in a tax-advantaged manner. Contributions to the Special Pay Plan permanently save payroll taxes, including 7.65% Social Security and Medicare taxes, on the money placed into the plan.

Envoy Plan Services and MidAmerica administer the Los Rios Special Pay Plan. MidAmerica will establish a 403(b) account on your behalf and will mail you a welcome packet with more details. You are 100% vested in the account balance at all times. Your account balance earns a guaranteed fixed interest rate of 1.75% (in 2016) and is reset each January. Assets can remain in the Special Pay Plan or you may withdraw the funds (at which point they will be subject to income tax), take multiple distributions, or rollover funds to an IRA or other retirement plan.

Once your account is established – even before you receive the welcome packet – you can log in at www.mymidamerica.com and download forms. When you log in for the first time, you will need to use your social security number (SSN) as the username and the last 4 digits of your SSN as the password.