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Annuitants Can Receive Incentives by Opting Out of State Insurance

Annuitants Can Receive Incentives by Opting Out of State Insurance

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Posted: 
July 15, 2013
Health Insurance Policy

Effective July 1, 2013, Public Act 98-0019 allows Non-Medicare annuitants who opt out of the State of Illinois Health Insurance Program the opportunity to enroll in a financial incentive program.  Non-Medicare annuitants with 20 or more years of service are eligible for $500.00 per month and Non-Medicare annuitants with less than 20 years of service are eligible for $150.00 per month.

Annuitants wishing to opt out and receive the incentive must be currently enrolled in the State of Illinois Health Insurance Program, have proof of other comprehensive medical coverage provided by an entity other than the Department of Central Management Services (CMS), and not be eligible for or receiving Medicare benefits.  Eligible annuitants have until September 30, 2013, to opt out of the state’s coverage without experiencing a qualifying change in status.

Annuitants electing to opt out cannot be enrolled as a dependent in any other plan administered by CMS (i.e., TRIP, CIP or LGHP). The opt-out with financial incentive application and proof of other coverage must be submitted to the State Universities Retirement System. Approved opt-out applications will become effective the first day of the month following receipt of the application by the retirement system.

The financial incentive is considered income and is subject to state and federal taxes as well as FICA.  Annuitants will be required to submit the appropriate tax forms in order to receive the financial incentive. Incentive payments will be issued monthly through the Comptroller of the State of Illinois and can be made either via a voucher or through a direct deposit agreement. The state will send the annuitant a W-2 form each January to be used for income tax purposes.

To obtain the financial incentive form please call the SURS office at 1-800-275-7877 or 217-378-8800 in the Champaign-Urbana area.

Forms must be returned by September 30, 2013, along with proof of other medical coverage.

To read the CMS letter of explanation click here.