The New Hampshire Retirement System (NHRS) provides a medical insurance subsidy to qualified retired members. The medical subsidy is a payment made by NHRS toward the cost of health insurance for a qualified retiree, his/her qualified spouse, and his/her certifiably dependent children with a disability who are living in the household and being cared for by the retiree. Under specific conditions, the qualified beneficiaries of members who die while in service may also be eligible for the medical subsidy.

Different provisions for the medical subsidy apply to Group I members and Group II members.

Medical Subsidy for Group I Members (Employees and Teachers)
RSA 100-A:52-a provides a medical insurance subsidy to qualified retired teacher members and political subdivision employee members (employees of cities, counties, school districts, towns and other units of local government). Pursuant to current law, the medical subsidy is not payable on behalf of Group I state employees who retired after July 1, 2004. State employees must contact the New Hampshire Division of Personnel for information about retired state employee health insurance.

Qualified Group I retirees and their qualified spouse and certifiably dependent children with a disability may be eligible for the medical subsidy under the following requirements:

• Members with at least 20 years of Group I creditable service retiring as a teacher or political subdivision employee who are eligible to retire on Service, Early Service or Ordinary Disability Retirement on or before July 1, 2008 and who retire on or before July 1, 2009, will be eligible at age 60.
• Members with at least 30 years of Group I creditable service retiring as a Group I teacher or political subdivision employee who are eligible to retire on Service, Early Service or Ordinary Disability Retirement on or before July 1, 2008 and who retire on or before July 1, 2009, will be eligible at ages 55 through 59.
• Members with at least 20 years of Group I creditable service who also have Group II service as a firefighter or police officer and who retire as a teacher or political subdivision employee on or before July 1, 2009, should contact NHRS to determine their eligibility for the subsidy.
• Each year of teacher job-sharing is counted as one-half of a year toward eligibility for the medical subsidy.
• Vested Deferred members must have retired on or before July 1, 2009 to qualify for the medical subsidy.
• Accidental Disability retirees must have retired on or before July 1, 2004 to qualify for the medical subsidy.

Medical Subsidy for Group II Members (Firefighters and Police Officers)
RSA 100-A:52 provides a medical insurance subsidy to qualified retired Group II firefighters and police officers members.

Group II members who were active or retired Group II members as of June 30, 2000, and their qualified spouse and certifiably dependent children with a disability may be eligible for the medical subsidy under the following requirements:

• Group II members who retire under Service Retirement with a minimum of 20 years of Group II creditable service, or retire under Service Retirement at age 60 with no minimum service required.
• Group II members who retire under Ordinary Disability Retirement (non-job-related).
• Group II members who became Group II members before July 1, 2005 and who retire on Accidental Disability Retirement (job-related).

IMPORTANT:

• Members must be active Group II members at the time of retirement. Members who retire under Vested Deferred Retirement do not qualify for the medical subsidy
• Members with at least 20 years of Group II creditable service who also have Group I service as an employee or teacher, or Group I service prior to a job reclassification to Group II, should contact NHRS to determine their eligibility for the medical subsidy.

Medical Subsidy Eligibility – Group I and Group II

• Members may not use most service credit purchases made after 8/10/03, any out-of-state service, or any prior military service for the purpose of qualifying for the medical subsidy.
• Qualified retirees, or other qualified persons, must participate in the health insurance through the retiree’s former NHRS participating employer in order to receive the medical subsidy benefit.
• Qualified retirees who decline the medical subsidy because they have health insurance coverage through another employer-sponsored plan will be permitted to return to their former employer’s plan in order to receive the medical subsidy, when they are no longer eligible for the other employer-sponsored health insurance coverage.

Medical Subsidy for Beneficiaries

Member’s Death Prior to Retirement:
Ordinary Death: The surviving spouse of a member who dies while in service as the result of a non-job-related death (Ordinary Death) would qualify for the medical subsidy until death or remarriage, provided that the surviving spouse is entitled to receive a monthly pension as a result of the member’s death and was covered in the member’s employer-sponsored plan before the member’s death. A member's certifiably dependent children with a disability who are living in the household and being cared for by the member's qualified surviving spouse may be eligible for the medical subsidy regardless of age; contact NHRS for more information.

Accidental Death: The surviving spouse and the dependent children of a member who dies while in service as the result of a job-related-death (Accidental Death) would qualify for the medical subsidy, provided that the surviving spouse and children are not receiving and are not eligible to receive medical benefits from any other employer-sponsored plan. The subsidy would be payable for children until age 18, or until age 23 if attending school full-time, and for the spouse until remarriage or death. A member’s certifiably dependent children with a disability who are living in the household and being cared for by the member's qualified surviving spouse may be eligible for the medical subsidy regardless of age; contact NHRS for more information.

Member’s Death after Retirement: The surviving spouse would qualify for the medical subsidy, provided the retiree qualified for the subsidy and the surviving spouse would be eligible to receive a monthly pension. The subsidy ceases upon remarriage of the surviving spouse.

Medical Subsidy for Qualified Spouses

A qualified spouse will become ineligible for the medical subsidy if the following occurs:

• The retiree divorces from the qualified spouse.
• A surviving spouse remarries.

Medical Subsidy Rates

The medical subsidy rates, in effect as of July 1, 2007, are listed in the following chart.  Beginning July, 2012, the rates will increase by 4% each year on July 1st and are based on NHRS’ fiscal year of July 1st - June 30th.

Medical Subsidy Payments

• NHRS makes medical subsidy payments directly to the retiree’s former employer or to the former employer’s insurer or health care administrator, applied toward the cost of health insurance. Medical Subsidy payments are not paid directly to the retiree.
• If the health insurance premium amount is less than the medical subsidy amount, then only the health insurance premium amount will be paid.
• If the health insurance premium amount exceeds the medical subsidy amount, then the retiree or other qualified person will be responsible for paying any excess that the employer does not pay. Any excess premium amount may be deducted from a retiree’s or other qualified person’s pension and remitted by NHRS to the employer or health care administrator.
• NHRS and the former employer must be notified of a qualified retired member’s divorce, qualified member or spouse’s eligibility for Medicare benefits, qualified spouse’s or beneficiary’s death, and a qualified surviving spouse’s remarriage or death. Failure to notify NHRS of such changes will result in a recovery of medical subsidy overpayments.

Medical Subsidy and Medicare

At age 65, or earlier if receiving Social Security Disability, the medical subsidy will be reduced to the Medicare Supplemental rate on the first of the month in which the member or spouse attains age 65 or becomes Medicare eligible, whichever occurs earlier. If a retiree or spouse is not age 65, he/she will continue on the employer’s regular group health insurance plan until attaining age 65.

• Retirees should contact Medicare regarding Part A and Part B, and the coverage each provides. To ensure continuation of coverage with a health insurance carrier, retirees are required to obtain Medicare B.

• Retirees must contact their former employer and NHRS when becoming Medicare eligible, so that the Retiree Plan may be converted to the Medicare Supplemental Plan.

IMPORTANT: If a retiree’s Medicare information is not provided to NHRS prior to attaining age 65, the medical subsidy will automatically terminate and the full health insurance premium will be deducted from the retiree’s monthly benefit.

NOTE: Medicare is not an NHRS benefit. Members must contact Social Security directly to confirm eligibility for Medicare.

Medicare Eligibility – Group II

• Individuals who became Group II members on or after April 1, 1986 pay the Medicare portion of Social Security and may be eligible for Medicare at age 65.
• Individuals who became Group II members prior to April 1, 1986 may become eligible for Medicare through a spouse’s record, through an ex-spouse’s record (if married for 10 or more years), or by purchasing Medicare coverage.
• Group II members must contact Social Security directly regarding eligibility for Medicare.