Working After Retirement? Your Health Plan Costs Could Go Up

Blue stethoscope on white background with the words "retiree health care"

Returning to work on a temporary or part-time basis after retirement can be a satisfying arrangement. Retirees can perform meaningful work while enjoying greater flexibility, and university departments can take advantage of retirees’ significant skills and institutional knowledge.

But in some circumstances, returning to work after retirement can increase your health care costs. It’s important to understand how your retiree health plan rate may be affected before making arrangements to return to work at U-M.

How Could Returning to Work Impact My Costs?

Since 2016, the Affordable Care Act has required the university to expand employee health coverage to temporary, contingent and regular employees who meet certain criteria. This coverage is required under what’s known as the Employer Shared Responsibility or "ESR" provision.

If you have health coverage as a retiree but you become eligible under ESR, your health plan will remain the same. However, the amount you pay will change because the university will have to provide you with employee ESR coverage. This may cost more than your retiree rate.

Eligibility for ESR Coverage

You may become eligible for benefits under ESR after retirement if any of the following apply to you.

  • You return to work as a temporary, contingent or regular employee within 26 weeks of retirement.
  • You return to work in a temporary or contingent position for at least 30 hours per week.
  • You return to work and you average more than 30 hours per week over 12 months in one or more positions.

If you become eligible for ESR coverage, the university will change the amount you pay for health benefits accordingly and send you a confirmation statement at your current address on file. View monthly health plan rates under ESR to see what your new cost would be.

The university will reinstate your retiree health plan rate when your period of ESR eligibility or your appointment ends.

Take ESR Into Consideration When Planning a Return to Work

The easiest way to find out whether you’ll be impacted by ESR if you return to work after retirement is to request an ESR eligibility evaluation. Call the SSC Contact Center at 5-2000 (option 1) from the Ann Arbor campus, (734) 615-2000 (option 1) locally, or (866) 647-7657 (option 1) toll free, Monday through Friday, 8 a.m. to 5 p.m. to request an evaluation.

You may also wish to review the special considerations for retirees under Frequently Asked Questions About ESR, which includes important information about Medicare.