California law permits a school employer to request that employees hired before April 1, 1986, be divided into two groups
—employees who desired to be covered by Medicare and those who do not desire such coverage. During this process, called
a Medicare Division Election, eligible employees make an irrevocable choice whether to be covered by Medicare. For those
employees who elect to be covered by Medicare, they and their employer will each pay the payroll tax (in 2002 and 2003, 1.45
percent of salary) and the employees will earn credits toward Medicare coverage.
Federal law requires that all employees hired on or after April 1, 1986, pay the Medicare tax and thereby earn Medicare credits.
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The Medicare Premium Payment Program was established by CalSTRS in July 2001 to pay the Medicare Part A (hospital) premiums
for eligible retired CalSTRS members. This program was created because many California educators, who were hired prior to
April 1, 1986, are not eligible for Medicare Part A because they and their employers have not paid the Medicare tax. As a
result, many CalSTRS Defined Benefit Program members are not eligible for premium-free Medicare Part A coverage unless they
are covered by their spouses’ eligibility.
A Medicare Division Election is necessary for eligible DB Program members to participate in the CalSTRS Medicare Premium
Payment Program. Eligibility is currently extended to DB Program members who retire on or after January 1, 2001, and prior
to July 1, 2012, from a district that has held, or is in the process of holding, a Medicare Division Election. Further,
members must retire during or after the actual 10-day election period when members indicate their decision to pay the Medicare
tax.
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Ask your district. Typically the Human Resources or Payroll office staff will know, or review the Medicare Division Report.
If your school district is listed, you can check to determine if an election is in progress.
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The process of holding a Medicare Division Election is often a bargainable issue. CalSTRS suggests you talk with your local
union officers and representatives. Ask them to negotiate that the district conduct a Medicare Division Election as part of
the bargaining agreement.
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CalSTRS cannot tell you how to vote. However, we can tell you the consequences of your vote.
First you need to know whether you are already eligible for premium-free Medicare Part A. You can be covered through your own
employment or that of your spouse. If you or your spouse presently or will receive Social Security Retirement benefits, you may
be eligible for premium-free Medicare Part A. If you do not know or would like to confirm your eligibility, call the Social
Security Administration toll free (800) 772-1213. (When you get the menu, dial “5” and then dial “0” to talk
to a representative.)
If you are already eligible for premium-free Medicare Part A because of your or your spouse’s employment, you are not eligible
for the CalSTRS MPP Program. Therefore, you can vote “no” without affecting your eligibility for premium-free Medicare
Part A.
If you are age 58 or older at the time of the election and if you retire prior to July 1, 2012, you will be eligible for the CalSTRS
MPP Program regardless of how you choose to vote.
If you are less than age 58 at the time of the election and you are not otherwise eligible for premium-free Medicare Part A, you must
vote “yes” to be eligible for CalSTRS to pay your Medicare Part A premiums when you become eligible for Medicare.
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No. The Medicare Division Election is an individual rather than a majority vote. Each person decides for him or herself and your
colleagues’ votes do not affect your choice.
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When the Medicare Premium Payment Program was originally authorized in legislation, only those Defined Benefit Program members, who
retired prior to January 1, 2001, were eligible. The Teachers’ Retirement Board has the authority to extend the eligibility for
the MPP Program. In its April 2007 meeting, the Board extended the program to DB Program members who retire prior to July 1, 2012.
The Board also has the authority to further extend eligibility for the MPP program. CalSTRS will publicize any extension of the
eligibility for the MPP Program as well as any other benefit enhancements in the Bulletin, the Retired Educator and on our Web site.
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The California Public Employees’ Retirement System administers the Medicare Division process on behalf of the federal government.
Contact CalPERS at the following address and phone number for further information to begin the Medicare Division process:
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