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When you retire, you can choose to continue your MDEA until the end of the year, or terminate your participation at the time you retire. If you decide to end your MDEA at retirement, your period of coverage will end on your retirement date and any unclaimed funds will be forfeited. You cannot change your annual election amount at this time, and once you have retired, you cannot enroll during Open Enrollment for the following year.

If you want to extend your participation in the MDEA when you retire in order to avoid forfeiture of money that you have already contributed to your MDEA, you have two options:

  • You can authorize the employer to take an aggregated (lump sum) deduction, or
  • You can elect and pay COBRA continuation payments until you can submit expenses for the election amount.

In either case, extending your period of coverage will give you more time to incur eligible expenses, thus providing you with more opportunity to claim reimbursements from your account.

Aggregated Deduction. Authorizing the employer to make an aggregated deduction for the remaining amount to pay up your account in full will enable you to extend your period of coverage until the end of the plan year. You should call the Employee Insurance Division and send a written notice authorizing an aggregated deduction one month prior to your retirement. This amount will be taken as a pretax payroll deduction. A payment other than payroll deduction is not permissible.

COBRA Continuation of Coverage. Choosing to make COBRA payments will enable you to continue making payments to your MDEA on an after-tax basis to extend your period of coverage on a monthly basis until continuation payments are stopped or until the end of the plan year, whichever comes first. Upon your retirement, you will receive a Notice of Continuation Rights from SEGIP.

For additional information about continuation of pre-tax accounts, please see the Plan Year Summary

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