Retirement Eligibility Changes Begin January 1, 2021

A retirement-aged man and woman sitting at a table, planning, with paper, pens and calculator.

Two changes in how U-M contributes to retiree health benefits will become effective Jan. 1, 2021. If you’re considering retirement in the next few years or planning for it, factor this information into your budgeting process.

These changes impact faculty and staff who will retire in 2021 or later. They are part of a series of gradual adjustments that began in 2013 to support the long-term sustainability of U-M’s benefits programs.

80 Points to Retirement

Beginning in 2021, you’ll need to accrue 80 points to be eligible for retirement. This is an increase from the 79 points required in 2019 and 2020. Points = your age + your years of eligible service.

U-M Contribution Based on Years of Service

The second change impacts retirees’ cost contribution for health benefits. U-M shares the cost of health benefits for eligible retirees and their dependents. This video explains the basics about U-M and retiree cost-share for health benefits.

The university’s contribution to health benefits will be based on your accumulated years of service if you retire with less than 20 years. Those who retire in 2021 with 10 years of service will see the most change in cost-share, with your portion increasing slightly. A sliding scale will be in effect for those who retire with between 10 and 20 years of service.

In general, the change is largest if you retire with less service. Those who retire with 20 or more years of service are not affected.

See the table below for more details.

Changes in Cost of Health Benefits for New Retirees in 2019 and 2021
Year of Retirement Points Needed to Retire Years of Service Retiree Share of Health Plan Cost (Your Coverage)* University Share of Health Plan Cost (Your Coverage)* Retiree Share of Health Plan Cost (Dependent Coverage)* University Share of Health Plan Cost (Dependent Coverage)*
2018 78 10 or more 17.5% 82.5% 45% 55%
2019 79 10 or more 20% 80% 50% 50%
2020 79 10 or more 20% 80% 50% 50%
2021 or later 80 10 or 11 60% 40% 75% 25%
2021 or later 80 12 or 13 52% 48% 70% 30%
2021 or later 80 14 or 15 44% 56% 65% 35%
2021 or later 80 16 or 17 36% 64% 60% 40%
2021 or later 80 18 or 19 28% 72% 55% 45%
2021 or later 80 20 or more 20% 80% 50% 50%

*Approximate: Actual costs vary by plan choice, Medicare status and coverage level. Assumes date of hire before 2013. If you were hired in 2013 or later, the same rules will apply starting in 2021, but the maximum university contribution you can receive will be lower.

Keep in mind that if you retire before age 62 and your date of service is on or after July 1, 1988, U-M does not share the cost of your health benefits. You pay the cost in full through the month you turn 62.

Plan Ahead

To get an idea of what retiree health plan options cost today, browse rate charts under U-M Retiree Health Plans.