My manager is giving me hints that i would be on the chopping block.. i am in the process of looking for jobs outside but have a question on SERMA. I am eligible for retirement according to rule of 75, if Intel fires me do they still pay me SERMA or does that retirement have to be voluntary?
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You forgot accelerated RSU's @7siw. And for healthcare... what healthcare? That's what SERMA is for.
Also, all rules, not just Rule of 75, get those things. Rule of 55 doesn't get acelerated RSUs though.
-lfg
Taking the rule of 75, collect your healthcare and pension too and give BK the 🖕
yes you will get SERMA regardless
Good points, @dod. I stopped reading once it appeared I couldn't even be offered in the first place. Appreciate you pointing that out for us. :)
-lfg
I just read the IRS info (https://www.irs.gov/uac/cobra-questions-and-answers-for-employees-and-former-employees). If one negotiates up front with a prospective employer to ensure your position is not marked for eligibility, you may be OK. There are multiple ways to do this (contract until 2018, have the job classified as not eligible for benefits, etc.). The point may not be to screw Intel or get cash out of the COBRA -- some may have queued up for surgery or some other procedure and want to avoid going to the back of the line under a new medical plan and provider.
Good post @nyd. Thanks for posting. :) I knew there was something like what you describe, but since it didn't apply to me I didn't know the facts, not to mention I forgot about it. lol
-lfg
I notice the thread is moving to COBRA at termination versus the original question about SERMA at termination, which is not the same thing. SERMA stands for Sheltered Employee Retirement Medical Account. Intel contributes a certain amount, I think $1.5 per year of service, into the account ONCE YOU HAVE RETIRED. It takes about 8 weeks. It becomes like an FSA for your retirement health expenses. Long-time employees can get a nice little bucket of money that way. It is yours once you reach the various rules and cannot be taken away, although the last ERP provided an additional bonus payment of 6-12K-ish, depending on if you were single or had family. SERMA is separate from COBRA. As you are still employed, now is a good time to go to Circuit and read all the info at the retirement pages. There is tons of stuff there.
I took the last ERP. In my case I get the Intel-covered COBRA too, even though I am Medicare age. The only gotcha is the COBRA will consider Medicare as the primary coverage and then my Intel coverage is secondary. So there is no benefit putting off signing up for Medicare if you are eligible i.e. 65 and going to get COBRA from Intel. In fact, if you don't sign up for Medicare as soon as you are eligible and not working full time, you will be penalized and pay a higher rate for life once you do sign up. IF you are still working full time you can delay signing up for Part B without penalty, until you are terminated (or retire of your own choosing), but being covered by COBRA does not count as 'coverage from full-time employment'. Also, be aware that even if you are still working at Intel and covered by an Intel health plan, once you hit 65, you must sign up for at least Part A. That, in turn, means you can no longer contribute to an HSA, even if you are still inside and on one of the HDHP plans. If you fail to sign up for Part A, there is no penalty down the road as it is premium-free, but anything you put into an HSA after age 65, whether you signed up for Part A or not, is not a valid contribution and has to be unwound come tax time or you will be hit with a penalty on your HSA money. In fact, once you leave Intel and sign up for Medicare Part A, they will make it retroactive to your 65th birthday. Wacky, I know. This was not made clear to me at Annual Enrollment at all so I kept contributing to my pretax HSA. The damage won't be too bad in my case as I'm only 66, but I know an ERPer who left at age 69 and she will have to unwind a lot of HSA money and pay delayed tax on everything she has to take out.
Sorry to hear about your mgr dropping hints that you will be chopped. Must be a fact then and he is giving you time for job search while still working. Sounds like a good guy to provide you advanced warning. That did not happen to those of us that fell in ACT16. Never given the same opportunity, just chopped and discarded.
No @muf. What @ihm says is not true. Sure, you can decline it BUT you'd better hope you're not caught by the IRS. Did neither of you read what I posted or look at the link I provided? We wouldn't be having this convo if so.
Here is is once more:
Once you become eligible for other group health coverage or Medicare, you're no longer eligible for the COBRA premium subsidy, regardless of whether you actually enroll in the other group health coverage or Medicare.
An individual who fails to notify the health plan providing COBRA coverage and continues to receive the COBRA premium subsidy after they are eligible for other group health coverage or Medicare may be subject to a penalty under IRC § 6720C. This penalty is equal to 110% of the subsidy provided on the individual’s behalf after they became eligible for the other coverage or Medicare.
Full page here: https://www.irs.gov/uac/cobra-questions-and-answers-for-employees-and-former-employees
-lfg
Yes you can decline medical coverage and keep the COBRA. Thats what I did. I declined the medical insurance from my new employer and switched over to their plan mid year when my COBRA ended.
I have COBRA (ERP & ISP) and starting a new job that offers health coverage. Can I deny the new health coverage, wait until COBRA expires and then start the new health coverage offered by the new employer?
You're welcome. I found the info I was looking for in regards to COBRA and getting a new job:
Once you become eligible for other group health coverage or Medicare, you're no longer eligible for the COBRA premium subsidy, regardless of whether you actually enroll in the other group health coverage or Medicare.
An individual who fails to notify the health plan providing COBRA coverage and continues to receive the COBRA premium subsidy after they are eligible for other group health coverage or Medicare may be subject to a penalty under IRC § 6720C. This penalty is equal to 110% of the subsidy provided on the individual’s behalf after they became eligible for the other coverage or Medicare.
Full page here: https://www.irs.gov/uac/cobra-questions-and-answers-for-employees-and-former-employees
Also note to anyone that might stumble on this page and be eligible for retirement under the Rule of 55 .... That rule is the ONLY rule where you do NOT get accelerated RSU's. You get all other retirement benefits. Accelerated RSUs is the only perk you miss out on for the Rule of 55.
-lfg
Awesome thanks buddy
One other thing to note if they cut you and offer COBRA. If you take another job you can't keep COBRA, even if it's cheaper (which it currently is for me so I'm not looking for a job until it's done with). I'd paste the IRS laws concerning that but I lost the window when my PC rebooted itself and not finding it in the History when searching for it. Stupid computer. (penalty is something like 110% but might be more)
-lfg
If you are eligible under one of the retirement rules (including the Rule of 55). they CANNOT take away your retirement perks. However, if you're a day or more away from meeting one of the rules they aren't being so nice to give you the retirement perks. I know someone that got screwed mere weeks away when he was ISPed. He tried to get the retirement benefits but was turned down.
I also know that if you were eligible for a package like ERP (doubt they'll give another like that though) AND were on the ISP list... then you are walked out immediately after your meeting with HR and/or your manager, BUT you'd get the ERP package since they cannot take away earned benefits. That happened to a friend of mine.
So, if you're eligible under one of the retirement rules, you'll get to keep your SERMA and accelerated vesting of RSUs and you'll get a retirement award of $300 added to your reward Visa card so don't toss that. You might even be able to have a retirement party. I say might only because you ARE entitled to one, yet not all managers/admins are planning them. You could always plan your own. :)
Search Circuit for retirement benefits and read what all you get. I believe I covered them all but might have missed one.
Good luck.