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433 RETIREE INSURANCE

Revised: March 10, 2004 Revised: October, 2010 Revised: February 9, 2011 433 RETIREE INSURANCE All currently working staff who are eligible for health insurance (see below) shall be eligible to receive continuation coverage as retirees in accordance with this policy as required by Minnesota law. Retirees also may be eligible to receive district contributions to continuation of health coverage. This policy is meant to be in compliance with Minnesota law and any specific language which this policy is silent on shall be found in favor of the district. A. Insurance Continuation Coverage for Former Employees and Dependents 1. Eligibility: A former employee and the employee’s dependents will be allowed to continue to participate indefinitely in the district-sponsored hospital and medical insurance groups the employee participated in immediately before retirement if the former employee: a. Is receiving a disability benefit or an annuity from a Minnesota public pension plan other than a volunteer firefighter plan; or b. Has met age and service requirements necessary to receive an annuity from such a plan. 2. A retiree who is less than age 65 will be pooled in the same group as active employees for purposes of establishing premiums and coverage for hospital and medical insurance. 3. A retiree reaches age 65 or is over age 65 may choose one of the following options: a. Obtain Medicare A and B coverage; or b. The retiree may continue to participate in the district’s group hospital and medical insurance that the employee participated in immediately before retirement. 4. Family Coverage may be selected only if the employee received family coverage immediately before leaving employment. If single coverage is selected, it will remain in effect and CANNOT be changed to family coverage at a later date. If family coverage is selected at the time of leaving employment, it can be changed to single only in the FORMER EMPLOYEE’S name. 5. In the event of the death of the former employee, federal law (COBRA) generally will allow continued coverage to be made available to the spouse for a period of up to 36 months. 6. An employee will be notified before leaving employment of the deadlines for electing continuation coverage. A retiree who does not elect to continue participation in the district’s group insurance plan by the deadline does not have a right to reenter the district’s group insurance program. B. School District Payments of Premiums or Charges for Group Health Continuation Coverage 1. Eligibility: Upon retirement from the district with a minimum of ten (10) years of service, a retiree shall be eligible to use an escrow sick leave amount to fund the retiree health insurance continuation benefit under this policy. 2. Escrow sick leave amounts to fund health insurance after retirement are calculated by multiplying the number of sick leave days remaining at the time of retirement by the retiring employee’s daily salary at the time of retirement. This daily salary calculation is capped at $250 per day for all school district employees. 3. Escrow sick leave amounts will be used to pay for a retiree’s health insurance premium until the escrow amount is depleted. An employee may thereafter continue to participate in the district’s health insurance plan at his/her own cost without any contribution from the district. 4. The district will not pay premiums directly to retirees. Also, no escrow sick leave amounts used to fund the retiree health insurance benefit under this policy shall be paid to surviving heirs or estates of the retiree who qualifies for this benefit. 5. Husband/Wife with a family policy - when the employee with the policy in his/her name retires, the other must apply for single or family contract in his/her name. If the employee’s spouse elects family coverage because the cost is paid by the district, the retiree’s escrow fund will remain untouched. 6. An eligible employee who has zero sick leave days at the time of retirement may continue to obtain health insurance coverage in the district’s group plan at their own cost and without any contribution from the district.

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