Medicare Eligible

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: 24FB178428 for 2024 or 25FB0178428 for 2025.

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.

BECOMING MEDICARE ELIGIBLE AFTER RETIREMENT

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.

BECOMING MEDICARE ELIGIBLE DUE TO DISABILITY

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.