Administrative Policies and Procedures Manual - Policy 3600: Eligibility for Employee, Retiree, and Dependent Benefit Plans

Date Originally Issued: 03-01-1987
Revised: 11-01-1991, 12-13-1991, 12-08-1999, 07-01-2001, 01-12-2005, 07-01-2007, 01-01-2008, 07-01-2011, 07-01-2013, 04-30-2014, 05-29-2014, 06-05-2014, 08-20-2015, 06-13-2016, 04-21-2017, 10-13-2017, 08-14-2018, 07-06-2020

Authorized by RPM 6.3 ("Privileges and Benefits")
Process Owner: Vice President of Human Resources

1. General

The University offers eligible employees, retirees, and dependents a diversified suite of benefit plans (“Benefit Plans”) from which they may elect coverage.  Specific components of the Benefit Plans are subject to change or termination.  For a description of the current Benefit Plans offered, visit the University’s Division of Human Resources (“HR”) website.  This policy describes how employees, retirees, and their dependents obtain and maintain eligibility for Benefit Plans coverage. 

2. Benefit Plans Coverage for Employees and Dependents 

2.1. Eligible Employees

The following types of employees ("Eligible Employees") are considered eligible to elect coverage under the Benefit Plans:

• regular staff employees who are full-time or part-time and have an appointment percent of 50% or greater
• term or contract staff employees who are full-time or part-time, have an appointment percent of 50% or greater, and have a minimum three (3) month term appointment or contract
• temporary staff employees who have an appointment percent of 75% or greater and have a minimum three (3) month appointment are eligible for certain Benefit Plans
• faculty members who have a minimum three (3) month contract and have an appointment percent of 50% or greater
• adjunct faculty who have a minimum three (3) month contract and have an appointment percent of 75% or greater are eligible for certain Benefit Plans
• post-doctoral fellows who have a minimum three (3) month contract and have an appointment percent of 50% or greater are eligible for certain Benefit Plans

The following types of employees are not eligible for coverage under the Benefit Plans:

• part-time employees with an appointment percent of less than 50%
• non-credit teachers
• on-call employees

2.2. Dependents

Employees may elect coverage for their eligible dependents in certain Benefit Plans.  Eligible dependents include:

• a legal spouse
• a surviving spouse
• a domestic partner; see UAP 3790 ("Domestic Partners")
• dependent children to age twenty-six (26); for the purposes of this policy dependent children includes natural children, stepchildren, legally adopted children, children placed for adoption, and children who are under the legal guardianship of the employee
• mentally or physically disabled dependent children over age twenty-six (26) if disabled prior to turning twenty-six (26), have maintained health coverage since turning age twenty-six (26), and providing documentation certifying disability (periodic recertification of disability may be required)

2.2.1. Documentation of Dependent Status

Documentation supporting dependent status, such as a valid signed marriage certificate, birth certificate, or an Affidavit of Domestic Partnership, as discussed in UAP 3790 (“Domestic Partners”), must be provided when requested for benefit enrollment.

3. Benefit Plan Coverage for Retirees and Their Dependents

The University provides medical and dental benefits and pays a portion of the premiums for the coverage (“Post-Retirement Benefits”) for certain retirees and for their dependents that qualify under the terms of Section 2.3. 

3.1. Initially Hired after June 30, 2015

Employees with an initial date of hire after June 30, 2015 are not eligible for Post-Retirement benefits through the University, though they may obtain basic and supplemental life insurance coverage during retirement.

3.1.1. Initially Hired from June 30, 2013 through June 30, 2015

Benefits eligible employees with an initial date of hire from June 30, 2013 through June 30, 2015 were considered eligible for the Voluntary Employee Beneficiary Association (“VEBA”), which is described below.  Of those, anyone employed on June 30, 2013 was VEBA eligible from day one.

3.2. VEBA

Effective July 1, 2013, the University established a VEBA with its own plan and trust documents.  The VEBA is a trust established to fund certain health benefits for retirees.  Beginning June 30, 2013, in order for employees hired prior to July 1, 2015 to be eligible for Post-Retirement Benefits, they must make payroll deductions to contribute to the VEBA in accordance with this policy. Those who contributed were grandfathered and are eligible for Post-Retirement Benefits as long as they continue to make contributions. 

Detailed information about the VEBA can be found in the VEBA plan and trust documents, which are available upon request from HR.  If any provisions in this policy conflict with the VEBA plan and trust documents, the VEBA documents, and any amendments thereto, control.

3.2.1. VEBA Service Credits

VEBA service credits accrue on an annual basis, at the rate of one service credit per fiscal year.  An exception was made for employees who were benefits eligible as of June 30, 2013 and who did not opt out of VEBA; these employees were credited with twenty-five (25) years of VEBA service credits.  Benefits eligible employees who began employment after June 30, 2013 and who contribute to the VEBA, or who opted out of the VEBA and later elected to contribute to it, earn one service credit per fiscal year.  UNM’s premium subsidy is prorated according to the number of VEBA service credits, with the maximum subsidy available to those with at least twenty-five (25) years of VEBA service credits.

3.3. Employees in Benefits Eligible Positions from June 30, 2013 to June 30, 2015 (“VEBA Window”)

To be eligible for Post-Retirement Benefits, employees must have met the requirements in Section 3.6 and:

• must be a benefits eligible employee VEBA participant and have not opted out of the VEBA, or
• must already be retired from the University and maintaining Post-Retirement Benefits.

Employees who were employed prior to the VEBA Window and return to the University on or after July 1, 2015 are not eligible to contribute to the VEBA or to receive Post-Retirement Benefits.

Returning VEBA-covered employees are eligible to contribute to the VEBA if:

• they were in a benefits eligible position, left the University, and returned to a benefits eligible position (and have not opted out of the VEBA), or
• they first became benefits eligible employees during the VEBA Window and did not opt out.
• they are a UNM retiree returning to work at UNM with actively maintained post-retirement medical and/or dental benefits.

Employees who opted out during the VEBA Window have a one-time opportunity to opt in, in accordance with Section 3.5 and the VEBA plan and trust documents.

VEBA Timeline (Special Rules)

3.4. Non-VEBA Related Retiree Benefits

Eligibility for Non-VEBA retiree benefits including but not limited to education benefits, basic and supplemental life insurance , and discounted tickets is not based on VEBA participation. In order for a retiree to remain eligible for Non-VEBA related retiree benefits, the retiree must meet the ERA or ARP requirements of Section 3600 herein.

3.5. Opting In and Out of VEBA Contributions

This section pertains to benefits eligible employees who were (1) at the University during in the VEBA Window or (2) those newly rehired.

Benefits eligible employees whose first date of employment was, or who were hired prior to, July 1, 2015 had the opportunity to opt out of VEBA contributions during their initial opt out window or during open enrollment periods for Benefit Plans.  Employees who opt out of making VEBA contributions will have one (1) opportunity to opt in after a waiting period of five (5) years or more.  The opportunity to opt in will occur during the open enrollment period for Benefit Plans immediately following five (5) years after the opt out effective date.  Employees who permanently opt out of VEBA contributions will not be eligible for Post-Retirement Benefits.   

Retirees who are enrolled in Post-Retirement Benefits and who return to work in a benefits eligible position must contribute to the VEBA in order to continue Post-Retirement Benefits at the time of their return to retiree status. 

3.6. Requirements for Receiving and Continuing Post-Retirement Benefits

To be eligible for and maintain Post-Retirement Benefits coverage, employees must:

• Meet the criteria for retirement under either the State of New Mexico Educational Retirement Act (ERA) or Alternative Retirement Plan (ARP).  Employees who qualify for disability retirement under the ERA’s rules may qualify for Post-Retirement Benefits.  Employees who pass away after submitting retirement paperwork under ERA or ARP and prior to the first official date of retirement are eligible for Post-Retirement Benefits, including coverage for eligible dependents (elected prior to retirement). Participants in the ARP must be fifty-nine and a half (59 ½) years (unless the employee is totally disabled and unable to continue employment) and must have applied for a distribution from the ARP provider; and
• Contribute to the VEBA, as provided for in Section 3.2, for at least the five (5) continuous twelve (12) month periods immediately prior to retirement.  VEBA status remains active for periods of approved leave without pay (LWOP) for purposes of meeting the requirement to make contributions for the five (5) continuous twelve (12) month periods immediately prior to retirement; and
• Elect coverage prior to the date of retirement and maintain continuous coverage thereafter, including being covered as a dependent by an active or retired spouse or domestic partner. In circumstances where a retiree elects to be covered as a dependent on an active employee or retiree's coverage, such retiree retains UNM Post-Retirement Benefit eligibility provided all other criteria are met.  If coverage is not elected at retirement or if elected and later canceled, retirees may not enroll in coverage at a later date.  

VEBA requires each individual employee to make VEBA contributions to retain access to UNM Post-Retirement Benefits as a primary benefit holder.

For UNM retirees who retired prior to VEBA implementation (July 1, 2013), those retirees are treated the same as though they are VEBA participants. Existing coverage for Post-Retirement Benefits for two UNM retirees, who are married or in a domestic partnership, may be separated to individual Post-Retirement Benefits upon request, or death, if the following criteria are met:

• • both must have a UNM retiree status
  • both UNM retirees must have individually met criteria for continuing Post-Retirement Benefits at the time of retirement
  • both must have continuously been enrolled in UNM’s post-retirement medical and/or dental coverage
  • existing Post-Retirement Benefits premiums are paid to current

This includes situations where one UNM retiree covers a second UNM retiree as a spouse or domestic partner on a UNM post-retirement medical or dental plan and the second retiree later becomes covered as a primary benefit holder under the second retiree’s own UNM Post-Retirement Benefits.

3.7. Additional Requirements for Medicare Eligible Retirees and their Dependents

In addition to the requirements in Section 3.6, within sixty (60) days from the date of retirement or, if already retired, date of Medicare eligibility, retirees and their dependents who are Medicare eligible must:

• enroll in the Original Medicare Supplementary Medical Insurance (Part B), and
• enroll in a UNM-sponsored Medicare Senior Plan (which must include prescription drug coverage)

Failure to elect a UNM-sponsored Medicare Senior Plan that includes prescription drug coverage will result in the cancellation of Post-Retirement Benefits.  

3.8. Rescission or Suspension of Retirement

If retirees rescind or suspend their ERA retirement pension or ARP distribution and return to UNM employment, VEBA contributions must be made in order to retain UNM Post-Retirement Benefits upon re-retirement. In all other cases, if a retiree suspends their ERA retirement pension or APR distributions, they will forfeit UNM Post-Retirement Benefit eligibility. 

3.9. Effect of Layoffs on VEBA Status

Employees who are laid off during their UNM employment and reemployed while eligible for re-employment rights under UAP 3225 (“Separation of Employment”) will retain active VEBA status while on layoff to meet the requirements of Section 3.6.  Employees neither contribute to the VEBA nor accrue VEBA service credits while eligible for re-employment rights due to layoff status.

3.9.1. Laid-Off Employees Eligible to Retire

Employees who are eligible to retire at the time they are laid off will be considered to have met the requirements of Section 3.6 for the period they remain eligible for re-employment rights under UAP 3225 (“Separation of Employment”). 

4. Contributions for Benefit Plans and Post-Retirement Benefits

4.1. Contribution Split for Employees

Benefits eligible employees and the University share the costs of certain Benefit Plans.  The University contributes a percentage of the costs based on the employees’ salary. 

Benefits eligible employees’ Benefit Plan contributions are due and payable each pay period, and are deducted from their paychecks.  

4.2 Contribution Split for Retirees

VEBA-covered retirees and the University share the costs of Post-Retirement Benefits. The University contributes a percentage of the costs for under age sixty-five (65) retirees based on the salary immediately prior to retirement and years of VEBA service credits pursuant to Section 3.1.  The University contributes a percentage of the costs for age sixty-five (65) and older retirees based on their years of VEBA service credits pursuant to Section 3.2.1.

Retirees’ contributions are billed on a monthly basis. Failure to pay the monthly contributions for any of the Post-Retirement Benefits will result in cancellation of all Post-Retirement Benefit coverage.  Retirees whose coverage is canceled due to non-payment of contributions will not be eligible for a reinstatement of coverage. 

5. Enrollment

5.1.   Initial Enrollment Periods

An eligible employee must enroll in the selected plans within sixty (60) calendar days from their initial eligibility date.

Eligible employees who do not enroll within the applicable enrollment period described above must wait until the next open enrollment period as described in Section 5.2 unless the employees experience a Qualifying Change of Family Status Event, as described in Section 5.3.1.  Late enrollments will not be accepted.

5.2. Open Enrollment Periods

From time to time, open enrollment periods will be scheduled to allow eligible employees and retirees to select or change Benefit Plans.  HR facilitates the open enrollment periods and notifies employees and retirees in advance. Under special circumstances, such as open enrollment periods in which eligible employees and retirees are required to make an affirmative enrollment in a Benefit Plan, HR may determine, in consultation with the University’s executive leadership, that open enrollment needs to be extended.  It may also be determined that in special circumstances, such as a year where all eligible employees and retirees are asked to make an affirmative enrollment in a Benefit Plan, eligible employees and retirees will be automatically re-enrolled to ensure they do not lose coverage in a Benefit Plan.

5.3.  Exceptions

5.3.1. Qualifying Change of Family Status

Certain events such as marriage, birth of a child, change in spouse’s employment, or divorce (“Qualifying Change of Status Event”) may allow employees to make a change to their Benefit Plans outside of an open enrollment period.  Changes in benefit elections must be consistent with, and be made within sixty (60) calendar days of, the Qualifying Change of Status Event.  Supporting documentation of the Qualifying Change of Status Event must be submitted to HR and approved in advance in order for changes to be made to Benefit Plans coverage. 

5.3.2. Health Insurance Portability and Accountability Act (HIPAA) Special Enrollment

Certain events such as marriage, birth of a child, and adoption or placement for adoption of a child may trigger special enrollment provisions under HIPAA.  Changes to Benefit Plans due to HIPAA special enrollment events must be made within sixty (60) calendar days from the date of the event.

6. Coverage While on Leave of Absence Without Pay

Benefit Plans coverage automatically continues for an eligible employee on approved leave of absence without pay (LWOP), unless the employee actively cancels the coverage by contacting HR's Benefits Office.  During LWOP, the eligible employee is responsible for paying the employee's portion of the monthly premium contributions, which will be billed to the employee during the LWOP pay period by the UNM Bursar’s Office. Failure to pay the monthly contribution for any of the Benefit Plans will result in the cancellation of the Benefit Plan coverage.

An eligible employee may prospectively cancel Benefit Plan coverage while on LWOP, subject to specific Benefit Plan requirements, by contacting HR's Benefits Office.  If an eligible employee wishes to cancel a Benefit Plan while on LWOP, coverage will terminate at the end of the month of cancellation. Eligible employees who cancel coverage during LWOP will be responsible for Benefit Plan premiums billed prior to the date of cancellation. 

If a Benefit Plan is canceled during LWOP, the eligible employee may re-enroll upon the following circumstances:

• within sixty (60) calendar days after returning to paid status,
• experiencing a recognized Qualifying Change of Family Status Event (see Section 5.3.1.), or
• the next available open enrollment period.

Coverage will begin the first of the month following enrollment.  If an eligible employee does not re-enroll within sixty (60) calendar days after returning to pay status and waits until the next open enrollment period, then coverage will lapse until elections made during open enrollment become effective.

7. Termination of Coverage

7.1. Separation from Employment or Employee Eligibility Ceases

Benefit Plans coverage will terminate for employees and their dependents as of midnight on the last day of the month in which employees separate from the University or their eligibility for Benefit Plans coverage ceases.  The employees’ share of the costs will be deducted from their last paycheck.  If the paycheck is not sufficient to cover their full share of the contribution, the will be billed for the difference by the UNM Bursar’s Office. 

7.2. Dependent Eligibility Ceases

Employees must notify HR when a dependent loses eligibility for Benefit Plans coverage as described in Section 2.3.  The coverage for a dependent that is no longer eligible will terminate as of midnight on the last day of the month that eligibility ceases. 

7.3. Consolidated Omnibus Budget Reconciliation Act (COBRA)

Some Benefit Plans may be continued in accordance with COBRA’s continuation provisions. If a COBRA qualifying event occurs, an individual covered under the University's medical, dental, vision, or medical Flexible Savings Account plan may elect to continue coverage for a specified duration based on the COBRA continuation provisions.

7.4. Policy Conversion and Portability

Some Benefit Plans may be converted or ported to an individual policy in accordance with the guidelines of each Benefit Plan.

8. Related Information

The HR website has additional information on the Benefit Plans and Post-Retirement Benefits offered by the University.

The Faculty Handbook Policy C280 ("Leave Without Pay") discusses faculty Benefit Plan coverage during LWOP.