Guide to Retirement

Congratulations on your upcoming retirement from Penn State! Penn State Employee Benefits would like to provide you with the most current information for a smooth transition into retirement and outline your benefits that you may retain upon your retirement.

Retirement Process:

  1. Six months to one year from your planned retirement date, attend a Preparing for Retirement presentation.
  2. Consult with your retirement plan vendor, TIAA or SERS, regarding your upcoming plans to retire.
  3. Call HR Services or submit an Inquiry through the WorkLion portal to confirm your eligibility to retire per Policy HR54, if hired prior to January 1, 2010.
  4. Notify your supervisor and/or local HR unit of your intent to retire so your unit can initiate the electronic retirement process in a timely fashion.
  5. Utilize the Preparing to Retire Checklist to ensure that your personal information is updated in Workday and you have reviewed your current benefits that will be available into retirement.
  6. If you and/or your spouse are Medicare-eligible, please see the detailed Retiring and Medicare-eligible Checklist.

Additionally, HR has prepared the following Retirement Resources an effort to help you understand the benefits you have after retirement, as well as to provide links to important retiree benefit information.

Retirement Resources
Retiree Kit 65+ and Medicare Disability Info & Forms Additional Resources
Preparing to Retire Checklists Retiring and Medicare-eligible Checklist Retiree Summary Plan Document
Preparing to Retire On-Demand Presentation (Coming Soon) Freedom Blue Informational Packet Phased Retirement Policy
2024 Rates 2024 Freedom Blue Summary of Benefits Phased Retirement Application
COBRA Rates for Dental and Vision Request for Employment Information CMS-L564
(retirees over the age of 65 yrs and 4 mo)
Lifetime Benefit Solutions
Frequently Asked Questions Freedom Blue Application Eyemed Discounts
Retiree Programs & Privileges 2024 Highmark Freedom Blue Network Sharing PARSE
Member - 1-866-918-5285
Non-Member - 1-866-456-7739
Reference Code: 23FB178428
Non-Medicare Summary of Benefits
2024 Lion Traditional Summary of Benefits
2024 Lion Advantage Summary of Benefits
Highmark Concierge Team: 1-844-945-5509

Active employees, also have the ability to utilize Penn State's Employee Assistance Program, SupportLinc, to have them help review your specific options.

Transition to Retiree Medical Benefits

Employees and their eligible dependents are automatically enrolled in the retiree medical plan if they meet the eligibility requirements to retire with medical benefits. No additional forms are necessary to enroll, unless:

  • The employee is Medicare eligible and/or spouse is Medicare eligible - in this scenario, Freedom Blue applications are required.
  • The employee is changing their family status, examples include going from Retiree Only coverage to Retiree and Spouse or going from Family coverage to Retiree Only
  • The employee wishes to change the non-medicare plan they are currently enrolled in examples include going from Lion Advantage to the Lion Traditional plan or vice versa. Please note, if switching medical plans upon retirement, any prior deductible or coinsurance amounts WILL NOT transfer to your new plan enrollment.
  • The employee wishes to refuse medical coverage into retirement. Retirees who refuse coverage will not be able to re-enroll at a later date.

If you experience any of the scenarios above, please complete a Retiree Request for Change Form.

Retirees who have spouse as an active Penn State employee

Retirees who carry a spouse who will remain actively employed by Penn State, will need to remove their spouse from their benefits as per Penn State policy, retirees must be covered via retiree medical benefits and active employees must be covered under the active employee coverage. Prior to retiring, you will need to complete a Retiree Request for Change Form to remove spouse upon your retirement. Your spouse must log into Workday to request enrollment in the Penn State active plan.

Note: Active spouses can add the retiring employee to dental and vision.

Medical Coverage

As a benefits-eligible, non-Medicare-eligible retiree, what health plan options do I have? 

You have the choice of either the Lion Advantage plan or the Lion Traditional plan. You may choose to keep the same plan in which you are currently enrolled into retirement, or you have the ability to switch plans at the time you retire. Note: If you are switching medical plans upon retirement, any prior deductible or coinsurance amounts WILL NOT transfer to your new plan enrollment.

As long as you, the retiree, are not eligible for Medicare, you could participate in the Lion Advantage plan with the Health Savings Account (HSA). Your contributions to the HSA as a retiree will be made through the HSA vendor website. The tax savings would be accounted for on your taxes and should be discussed with your tax advisor.

If you want to remain in the same plan in which you are currently enrolled as a non-Medicare eligible retiree, you do not need take any action when you retire.

If you want to change plans or your coverage level when you retire, you will need to complete a Retiree Request for Change Form prior to your retirement.

FOR PLANNING PURPOSES UPON RETIREMENT: You will remain in the active employee medical plan through the end of the month in which you retire. Upon the effective date, your information will be electronically sent to the Highmark.

You will receive new ID cards from Highmark. You may also call Highmark to obtain your new ID information should you need services before you receive your new cards. Your active employee ID card will no longer be valid. Please plan accordingly for prescriptions you are taking and try to refill them before the 1st of the month.

As a benefits-eligible, and Medicare-eligible retiree, what health plan options do I have?

If you and/or your spouse are already or will be eligible for Medicare, you need to contact your local Social Security office three months prior to your retirement.

You and/or your spouse will need to be enrolled Medicare Parts A and B, in order to transition into the Freedom Blue PPO plan through the University. Detailed instructions can be printed from the Resources above on the Retiring and Medicare-eligible Checklist.

Freedom Blue PPO will become your primary coverage for medical and prescription services. Do NOT enroll in a separate Medicare Part D program for prescription drugs, if it is your intention to stay with the Penn State Medicare Advantage plan offered to Medicare eligible retirees and their Medicare eligible dependents. Freedom Blue PPO includes coverage for Part D prescription drugs. Should you enroll in Medicare Part D, this could result in your Freedom Blue enrollment request being denied, as Per Medicare regulations, you should not be enrolled in more than one Medicare sponsored product at a time.

If you have questions pertaining to how Freedom Blue will cover specific services or regarding the prescription coverage, please call the non-member line at 1-866-456-7739 seven days a week, from 8 a.m. to 8 p.m. with REFERENCE CODE: 23FB178428

FOR PLANNING PURPOSES UPON RETIREMENT: Your unit will initiate your separation in Workday upon your retirement; your record will be updated to “retired” status. Your medical plan will be updated only after we receive your completed Freedom Blue Application. Please understand that if you are eligible to be enrolled in the Medicare plan upon your retirement, but do not complete the enrollment process prior to your retirement, you will not automatically remain in the Hghmark non-Medicare plan. This will result in having a period of NO Penn State medical coverage until you are enrolled in the Highmark Freedom Blue PPO Medicare plan. You will remain in the active employee medical plan through the end of the month in which you retire. Your retiree medical enrollment in Freedom Blue will begin the first of the month after you retire provided we have received your Freedom Blue application.

Failure to return the Freedom Blue application(s) within 60 days after your retirement will be considered a voluntary dis-enrollment in retiree medical benefits offered. Once dis-enrolled, retirees are not able to re-enroll at a later date.


Upon becoming eligible for Medicare Parts A and B, your medical coverage is required to change to the University-sponsored Medicare Advantage plan, Freedom Blue PPO offered through Highmark. We will mail you a letter approximately three months prior to you and/or your spouse turning 65 to remind you to take the following actions.

The Freedom Blue application must be received in the Penn State Employee Benefits office PRIOR to your 65th birthday with a copy of your Medicare card. If the Freedom Blue application is not received PRIOR to your 65th birthday, your Freedom Blue effective date will be the first of the month following receipt. Failure to enroll within 30 days of turning 65 could result in a cancellation of retiree benefits due to not being enrolled in the correct plan based on Medicare eligibility. Once dis-enrolled, retirees are not able to re-enroll at a later date.


If retirees are enrolled in both Medicare Parts A and B upon becoming Medicare eligible due to disability, they will be required to move to our Medicare Advantage plan.

If a retiree becomes Medicare eligible due to disability and enrolls in Medicare Part A only; Part A will pay as primary for hospital services and Highmark will pay as primary for Part B expenses.

Adding eligible dependents

Adding eligible dependents after retirement, requires a Qualifying Event. Retiree dependent coverage can be added ONLY if the eligible dependent experiences an IRS qualifying life event change. Changes must be requested within 31 days of the event by completing a Retiree Request for Change Form.

You can also contact Penn State HR Services at 814-865-1473 and have a copy of the form mailed to you. The following are examples of IRS-defined life event changes when you are able to add an eligible dependent:

  • Your retirement from the University or Employee's legal marital status changes
  • Adoption/legal guardianship
  • Changes in employment status of a spouse, which can include the ending of their employment, new or different working hours resulting in a change of their employer-sponsored benefits

If you are retiring at the age of 65 ½ or older AND enrolled in the Lion Advantage Plan

If you are currently enrolled in the Lion Advantage plan with the Health Savings Account, plan to retire within the next year, and are age 65 ½ or older, please read and take action as needed regarding a conflict between IRS regulations and Medicare requirements. 

An explanation of the issue and the solution is outlined below:

Issue: Anyone age 65 ½ or older who is enrolled in a qualified high-deductible health plan (Lion Advantage plan) with a Health Savings Account (HSA), who retires and enrolls in Medicare Part A, will experience a Medicare-required “look-back period” of 6 months. That “look-back period” overlaps with the timeframe during which you may have had either or both employer and employee contributions made to your HSA. IRS regulations state that an individual cannot receive or contribute to an HSA if covered by Medicare or any other health care insurance. If the individual were to be audited by the IRS, taxes and penalties could apply to the amount contributed to the HSA.

The proposed solution: In order to avoid potential tax issues, you want to STOP YOUR HSA CONTRIBUTIONS so that you have 6 months of NO contributions before you FILE FOR MEDICARE. For example, if you are retiring as of December 31 of any given year, you need to stop your contributions beginning with the June payroll of that same year. In order to move into the University-sponsored Medicare plan after you retire, you must first enroll in Medicare parts A and B.  Therefore, you must “file” for Medicare during the month of your retirement, which is December in this example. Social Security uses the filing date in December as part of the look-back period, which means you need to have NO HSA contributions from June – November.    

Please log into Workday through the Worklion portal to stop, start, or change your HSA contributions.  Any questions relating to Medicare guidelines, please contact your local Social Security office or your tax advisor.

Retiree Billing

We have contracted with Lifetime Benefit Solutions to administer, bill, and collect the health care premiums from all of our retirees who have the Penn State medical benefit.

For new retirees, after your retirement has been processed electronically in Workday, your retiree medical billing information will automatically be sent to Lifetime Benefit Solutions.

Your first Retiree Bill should come approximately two to three weeks AFTER your retirement. Payment is due within 60 days of receipt of your first Retiree Bill.

Retirees have the option to set up a monthly automatic withdrawal from a designated bank to pay for your retiree billing premiums.  The information to establish the automated payments will be included in your first retiree bill.  

If you do not set up automatic payment, you will be billed on a quarterly basis. Your premium payments are due on the 1st day of each calendar quarter and you will have a 60 day grace period. Premium due dates are: January 1, April 1, July 1 and October 1; your 60 day grace period will begin on the date after the payment due date. Please call Lifetime Benefit Solutions to discuss all of your payment options.

NOTE: You will receive a COBRA Notification extending coverage for medical, dental and vision; this notice is required by law, even if you are eligible for retiree medical coverage. If you are retiring with Penn State Retiree Medical, you should decline the offer for extended medical coverage. Failure to complete the COBRA Enrollment within 60 days is considered an automatic decline of the coverages offered.

Split Plans – Retiree With Medicare and Non-Medicare Members Enrolled

Once a retiree and/or spouse becomes Medicare eligible and the remaining spouse is under 65, your benefits then become a “split plan” retirement medical plan.  

The newly Medicare eligible retiree or spouse will be transitioned to the University-sponsored Medicare Advantage plan Freedom Blue with Highmark. The Freedom Blue Member will receive a new ID card from Highmark.

The remaining dependents will stay with Highmark and new ID cards will be issued as follows:

  1. Penn State retiree moves to Highmark with non-Medicare spouse
    • Spouse will remain with Highmark and become the primary subscriber under Highmark insurance.
    • Covered dependent children under the age of 26 will become dependents listed under the new primary subscriber.
    • A new ID card with new Member ID will be sent after the effective date.*
  2. Penn State retiree moves to Highmark with non-Medicare child/ren (no spouse coverage)
    • Dependent child/ren remain with Highmark and the oldest covered child under the age of 26 becomes the primary subscriber under Highmark insurance.
    • Any younger sibling(s) will be listed as dependent(s) under the oldest child.
    • A new ID card with new Member ID will be sent after the effective date.*
  3. Penn State retiree remains on Highmark with Medicare-eligible spouse
    • Retiree will receive a new ID card based on the tier change, but the Member ID will remain the same.
    • Spouse will receive a new Highmark Freedom Blue card.

*Should you need to call the vendor to inquire about benefits, members should provide the new primary subscriber’s information such as SSN and date of birth.

Changes will be electronically sent to the insurance vendors and to the retiree billing vendor. It is recommended you pay your quarterly bill as invoiced and the appropriate credits will follow once the retiree billing vendor receives the changes.

Tuition Discount

Tuition discounts for retirees and their eligible dependents continue into retirement. For additional information please visit the Retiree Tuition Discount page.

Retiree Healthcare Savings Account, employees Hired AFTER January 2010

For anyone who was hired after January 2010, the university will contribute $144 monthly into a Retiree Savings Account, administered by TIAA, to help pay for qualified medical expenses in retirement. Funds can be used to purchase health insurance and other qualified medical expenses for you and your eligible dependents.

Retirement Healthcare Savings Plan Advantages:

  • Money is set aside for your healthcare expenses at retirement while you are working
  • Money accumulated in your account can be used for a variety of healthcare expenses, such as healthcare insurance, co-payments, deductibles and long-term care insurance
  • Healthcare savings plan can be used yourself, spouse and eligible dependents
  • Tax-free growth on any earnings on the contributions Penn State makes on your behalf
  • Tax-free reimbursement of qualified healthcare expenses at retirement
  • On-line access to healthcare savings account, when you meet Penn State’s eligibility retirement qualifications.
  • Check Status of Claims
  • Submit a premium payment to health insurance provider
  • Access health and wellness tools

Retirement Healthcare Savings Plans Fact Sheet

For additional information or questions regarding retirement, please contact HR Services at 814-865-1473 or log an inquiry via the WorkLion portal.