The University is revising it service-counting rules for the Health and Welfare Plan for Retirees and Disabled Employees. These rules determine when employees become eligible to receive medical and other retiree benefits under the “Rule of 75.” This change will provide more flexibility for employees who may wish to switch to a part-time schedule to support their work and life goals.

What’s Changing

Effective as of January 1, 2017, the service-counting rules in the University of Pennsylvania Health and Welfare Plan for Retirees and Disabled Employees Plan that determine eligibility for retirement benefits (including, but not limited to, medical, dental, life insurance and tuition benefits) are being amended to eliminate the requirement that service be both full-time and continuous to count toward plan eligibility. After the changes take effect, all of an employee’s full-time service will count toward eligibility requirements even if an employee has an intervening period of part-time service. Periods of full-time University service separated by a period of part-time service will be bridged to determine eligibility.

What is not changing is that all service must be continuous in order for the full-time service to be counted.

Background on the “Rule of 75”

Employees are eligible to receive retirement benefits if they satisfy the “Rule of 75” eligibility requirements. The Rule of 75 is met when an individual is at least 55 years old, has at least 10 years of service, and the sum of that individual’s age and service equals 75. For example, an employee who is age 62 and has 15 years of service satisfies the Rule of 75 eligibility requirements, but a person age 52 with 25 years of service does not meet the rule because an individual must be at least 55 to qualify. Visit https://www.hr.upenn.edu/myhr/benefits/retiree/eligibility for details.

What Will Count Toward Eligibility

Under the new rules, effective January 1, 2017, an employee’s full-time service—both before and after a period of part-time service—will count under the Health and Welfare Plan for Retirees and Disabled Employee Plan. However, while a period of part-time service will no longer cause an employee to lose an earlier period of continuous full-time service, the part-time service itself will not count toward the Plan’s service requirements.

Also, the Plan’s service-counting rules continue to state that if there is an outright break in service in which a person is no longer a full- or part-time Penn employee, the service before the break will not be counted under the Plan. For example, if an employee leaves Penn to take a job with another organization and then later is rehired by the University, or if a full-time employee changes to temporary service, then returns to full-time employment, then the service before the break will not be counted.

More information about this change and the Health and Welfare Plan for Retirees and Disabled Employee Plan’s retirement service-counting rules can be found in the summary plan description (SPD), which can be accessed at https://www.hr.upenn.edu/myhr/benefits/spd

To request a written copy of the Plan’s SPD, contact the Division of Human Resources at (215) 898-6884.