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Common Mistakes Made by Retirees
1. Not Enrolling in/Dropping Required Part B of a CalPERS Medicare Plan
If you are enrolled in a CalPERS BASIC health plan, you must enroll in a CalPERS Medicare plan and pay for and maintain enrollment in Medicare Part B to remain enrolled in the CalPERS health program when you turn 65.
Important notes about Medicare Part B:
When you and/or your dependent are eligible to enroll in Medicare Part B, contact the SSA three months before your 65th birth month or when you receive the notice from CalPERS.
If you are retired, and you and/or your dependent are eligible for premium-free Medicare Part A (hospital coverage), you and/or your dependent must enroll in Medicare Part A and Part B (doctor coverage) and transfer to a CalPERS Medicare health plan to continue your CalPERS health coverage. The State requires all employees to pay the 1.65% Medicare payroll cost. All employees hired since 1985 are eligible for Medicare after ten years of employment (unless you were employed before 1985 and were not required to make payments).
If you do not enroll in Medicare Part B when you are first eligible, you may have to wait until the next enrollment period. You may be subject to a federal late enrollment penalty, and your premium will be higher for LIFE. You might also experience a lapse in your CalPERS health coverage because PERS will cancel your Basic Health Plan Insurance WHEN YOU TURN 65. You need to enroll in a CalPERS Medicare plan on the 1st of the month you turn 65. Do not wait for Open Enrollment. All of your Medicare questions can be answered in the CalPERS Medicare Enrollment Guide (PDF) available online or by phone at 1-888-CAL-PERS.
2. Enrolling in a Medicare Part D Medical Plan
Members should not enroll in any Medicare Part D plan (you will receive many offers in your mailbox as you near 65). Enrolling in one of these Part D plans will cancel your CalPERS health plan coverage as CalPERS prescription drug coverage is equal to, or better, than any you can purchase and is included in your CalPERS health plan premium.
3. Not Knowing What the 120-Day Rule for Retiree Health Insurance Entails
On a trip to Sacramento, I met a long-time CDF employee I knew from another unit at a gas station. He told me he had left CAL FIRE and was doing well. He said he was financially secure enough to retire working on his inherited family ranch and could start drawing his pension in two years (he worked 30 years with CAL FIRE since he was 18, so he didn’t need to work until age 50). I had the unpleasant task of telling him about the 120-Day Rule. You must retire officially within 120 days of your separation date from employment to obtain CalPERS paid health insurance. You can still retire once you reach age 50 based on your years of service, but your health insurance is gone unless reinstated.
4. Not Notifying PERS of a Member Death Quickly
When a PERS member passes, the family needs time to grieve, and you might hesitate to call CalPERS to inform them of the death. Unfortunately, although unpleasant, this task needs to be completed as soon as possible. CalPERS has to temporarily suspend all warrants and health care payments until they are assured the right person is receiving them. Be aware CalPERS can sometimes electronically retrieve money from bank accounts sent by direct deposit. Your beneficiary will be reimbursed for any healthcare costs once the Death Benefit Application Packet is returned to CalPERS and processed. This usually takes a week for survivors to receive the packet and 4-6 weeks to transfer the healthcare benefits and pension option you chose for your survivor/beneficiary at retirement.
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