Annual Leave and Medical Premiums

I have heard that at the time of retirement that you can use your AL balance to pay for medical coverage for up to a year.  Is this true and if so how does it work?

Yes, this is true. Check with your HR staff and MCHCP for specific information as it relates to you, but here is some general information we received from MCHCP on the topic: Your employer’s payout for your unused annual leave/vacation can be used to pay your medical insurance premiums during the remainder of the year in which you retire. When you fill out your MCHCP Retiree Enrollment Form, you may elect to deduct your premiums using your one-time lump-sum annual leave payout as long as you did not opt out of the Cafeteria Plan’s premium only category and current premiums are deducted pre-tax. Depending on how many hours of annual leave you have, this can be a sizeable amount and can result in tax savings!

After you send the form in, MCHCP will contact your department’s payroll representative to verify your lump-sum payout amount. You may only pre-pay for the remaining premiums in the year you have retired. For example, if you retire in July, you may potentially pay for your August-December premiums with your unused annual leave payout.

For more information about your particular situation, please contact MCHCP at (800) 487-0771.