Retiree Premium Subsidy Curtailed for New Hires


In December 2009, the PEIA Finance Board adopted a motion to eliminate retiree premium subsidies for all employees hired on or after July 1, 2010. When these employees prepare to retire, they will be eligible to continue PEIA health insurance, but they will pay the full premium for that coverage.

Current retirees’ health insurance premiums pay approximately 30% of the cost of providing their care. The other 70% of the premium is covered by employers and active employees. The premium subsidy amount for most retirees is determined on a sliding scale based on the retiree’s years of public service, with those having 25 or more years of service receiving the largest subsidy. Those who retired before July 1, 1997, also receive the largest subsidy.

Current employees who were hired before July 1, 2010, and who continue their participation in the PEIA plan until retirement will be eligible to receive a subsidized premium based on years of service. The amount of the premium subsidy is set annually by the Finance Board.

Those who have previously retired, but who become actively employed on or after July 1, 2010, with an employer participating in PEIA (and who therefore lose their status as a retired employee), will have a new date of hire which is after July 1, 2010, and will not be eligible to receive any premium subsidy when they return to retired employee status. EXCEPTION: the only exception to this policy is if the employee returns to retired employee status within two years of their new hire date. In such case, the employee, for premium subsidy purposes, will be treated as if they never left retired employee status and their original pre-July 1, 2010 date of hire will apply.


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