Retiree Medical Plan General Rules FAQ

In order to receive medical benefits under the Plan, you must be a benefits-eligible employee of Stanford University in good standing at the time of retirement and cannot have been terminated for misconduct. An individual whose employment with the University has been terminated for misconduct shall not be eligible to participate.Any eligible dependents of the terminated employee will also be ineligible to participate unless he or she is eligible to participate other than as a dependent. You can request a retirement calculation to determine your eligibility.

To qualify for the Retiree Medical Plan, you must have accrued at least 10 years of benefits-eligible service. Once you have done so, you may qualify for the retiree medical plan in one of two ways:

• If hired before 1/1/1992: You must be at least age 55 at retirement + 10 years benefits-eligible service or you may qualify by meeting the “Rule of 75” (below).
• If hired after 1/1/1992: You must meet the “Rule of 75” which means that your age + years of benefits-eligible service must equal at least 75.

For each month you work at least one day in a benefits-eligible position at Stanford, that month will count towards a year of service. Each 12 months is an additional year of service.

The amount of Stanford’s contribution toward the cost of your medical benefits depends on when you become eligible to retire and the length of your employment before you retire. These conditions determine if you receive a contribution under the LegacyContribution method or the Cardinal(Defined)Contribution method.

Under the LegacyContribution method, the university contributes a percent of the lowest cost plan towards your retiree and eligible dependent medical coverage. The lowest cost plan may change year to year. Be sure to look at the annual open enrollment information to determine which plan is considered the lowest cost when you enroll.You are eligible for the LegacyContribution method if, as of Dec. 31, 2005, you:

• Qualified as an official retiree eligible for retiree health care; or
• Were in a benefits-eligible position, at least age 55 and within five years of becoming an official retiree.

Cardinal, or the Defined Contribution Method fall into three categories depending on hire date and whether or not you had a break in service.The university contribution is calculated under the Defined Contribution method, where the university contributes a dollar amount for each year of benefits-eligible service. The university contribution cannot exceed the cost of the retiree health plan you choose. Below are general descriptions, but it’s important to have a retirement calculation done to determine your official category status.

• Category 1: If you were hired on or after January 1, 2006 in a benefits-eligible position, and did not have a break in service after December 31, 2007, the university contributes a dollar amount for each year of benefits-eligible service. Your years of service are calculated by using your exact number of years and months of benefits-eligible service.
• Category 2: If you had a break in service on or after December 31, 2007 before meeting the qualifications for official retiree status, only benefits-eligible years of service in the most recent period of employment will be used in the contribution calculation. If you stay in a benefits-eligible position for at least 10 consecutive years immediately preceding your retirement you will receive credit for your prior years of eligible service before the break. See Policy Review – Break in Service below for more information about this category.
• Category 3: If you were hired before Jan. 1, 2006 in a benefits-eligible position, and did not have a break in service after December 31, 2007, and do not qualify for the LegacyContribution method, you are guaranteed a minimum contribution as if you had 25 years of service. If your service is over 25 years at the time of retirement, your contribution will be based on actual years of service.

Effective January 1, 2008, the Retiree Medical Plan was modified to add a requirement that an employee who has become eligible for retiree medical coverage on or after January 1, 2008 and who wants to receive credit for prior University service for purposes of determining the University’s contribution to the cost of retiree health benefits must have at least 10 consecutive years of benefits-eligible service immediately preceding retirement.

Employees who do not complete the required 10 consecutive years of benefits-eligible service immediately preceding retirement will not have prior years of service recognized for purposes of determining the University’s contribution to the retiree medical benefit costs. Instead, only the benefits-eligible years of service in the most recent period of employment will be recognized for this purpose.

Exception: Employees who qualify for Legacy status at termination are not subject to this policy change.

If you qualify as an official University retiree when you leave Stanford, you retain that status if you return to a benefits-eligible position at a later date.

If you do not qualify as an official University retiree when you leave, all previous benefits-eligible service will count towards eligibility for official retiree status. If you were not in the Legacy category when you terminated, you must remain in a benefits-eligible position for at least 10 consecutive years immediately preceding retirement in order for your previous years of service to count towards determining the University contribution.