Over the past two years, the Teachers' Retirement Board has investigated alternatives
to relieve the financial burden associated with health care coverage for
many retired educators. The board determined that paying Medicare Part A
premiums for those without premium-free Medicare Part A coverage would be
an important step toward that goal.
The resulting legislation, SB 1435 - Johnston (Chapter 1032, Statutes
of 2000), establishes the California State Teachers’ Retirement System
(CalSTRS) Medicare Benefits Program. Beginning July 1, 2001, CalSTRS will
pay the Medicare Part A premiums for retired members of the Defined Benefit
(DB) Program who are not eligible for premium-free Part A (hospitalization).
All premiums and any applicable surcharges (penalties for late enrollment
into Medicare after age 65) would be paid directly to the Health Care
Financing Administration, which administers the Medicare program for the
federal government.
Retired members who meet all of the following requirements will be eligible
for this CalSTRS benefit:
- Retired from CalSTRS prior to January 1, 2001 and are receiving a monthly CalSTRS allowance, and
- Are not eligible for premium-free Medicare Part A, and
- Are at least 65 years of age, and
- Enrolled in Medicare Parts A & B at age 65 or as of July 1, 2001,
whichever is later. (This last requirement makes members eligible for
this benefit even if they don't turn age 65 until the future.)
SB 1435 also provides the Teachers’ Retirement Board with authority
to extend this benefit to eligible active members who retire in the future
under specific circumstances. If coverage is extended, the CalSTRS Medicare
benefit would be available to members who meet all of the following requirements:
- Retired under the DB Program on or after January 1, 2001, and
- Are not eligible for premium-free Medicare Part A, and
- Enrolled in Medicare Parts A & B at age 65, and
- Retired from a school district that either:
- Completed an election to permit employees to be covered
by the Medicare payroll tax prior to January 1, 2001; or
- Completed or is conducting such election on or after January 1, 2001,
and if the member was less than 58 years of age
at the time of the election, the individual member elected
to participate in the Medicare payroll tax.
Retired CalSTRS members who qualify for this benefit must enroll in Medicare
through the Social Security Administration.
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