Benefit Coverage Under WTA
Purchase of Prior Service
If you have eligible prior service, you may be able to purchase this service before you leave employment or retire under WTA. You must be an active member to purchase prior service. Read more about Purchase of Prior Service.
Already Purchasing Service?
If you are purchasing prior service through a payroll contract, your contract will end when you leave employment or retire under WTA:
- If you are on an after-tax contract, you may purchase any remaining service on your contract in a lump sum.
- If you are on a pre-tax contract, your contract will cease when you leave employment or retire under WTA. You may purchase any service remaining on your contract by claiming a hardship as provided in the Internal Revenue Code. The hardship provision allows you to elect to purchase your remaining service in a lump sum with after-tax funds or suspend your contract if you plan to return to a VRS-covered position. To claim a hardship:
- Write a letter to VRS indicating your intent to purchase your remaining service in a lump sum or requesting that your contract be suspended.
- Enclose a copy of a completed Employer Certification of Involuntary Separation Under Workforce Transition Act (VRS-11) 34kb or a letter from your employer certifying your involuntary separation under WTA.
- Send the letter with the enclosure to VRS at P.O. Box 2500, Richmond, Virginia 23218-2500. You will receive a letter at your mailing address verifying your election.
If you are eligible for the WTA cash severance benefit, see Department of Human Resource Management for more information about the continuation of your health insurance coverage.
If you are eligible to retire under WTA, you may elect coverage under the State Retiree Health Benefits Program when you apply for retirement. You must apply for coverage within 31 days of your retirement date. After 31 days, this program is no longer available.
You pay the full cost of the premiums for state retiree health insurance coverage. The premiums are deducted from your monthly retirement benefit. If the benefit is not sufficient to cover the deduction, the health insurance carrier will bill you directly for the premiums.
To apply, submit the State Health Benefits Enrollment Form for Retirees, Survivors and VSDP/LTD Participants with your retirement application. More information is available from the Department of Human Resource Management.
Retiree Health Insurance Credit
If you retire under WTA with at least 15 years of service credit, you may be eligible for the health insurance credit. The WTA retirement credit can count toward the service needed to qualify for the health insurance credit. Read more about the Health Insurance Credit.
Group Life Insurance
WTA Cash Severance Benefit-No Retirement
Coverage under the Basic Group Life Insurance Program continues for 12 months following your layoff date. If you are enrolled in the Optional Group Life Insurance Program, your coverage ends when you leave covered employment. If you die within 31 days of the last day of the month in which you leave covered employment, your beneficiary will receive your optional life insurance natural death benefit. For more information, see DHRM Website.
If you are not eligible for a retirement benefit when you leave covered employment, you may convert your basic group life insurance coverage to an individual whole-life policy. If you are covered under optional group life insurance, you may convert your coverage whether or not you are eligible for a retirement benefit.
To convert life insurance coverage, submit the Conversion of Group Life Insurance Enrollment (VRS-35E) 712kb within 31 days of the last day of the month in which you leave covered employment. This option is not available after 31 days.
Retirement under WTA
Your basic group life insurance coverage will continue into retirement. Coverage will begin to reduce by 25 percent each year until it reaches 25 percent of its original value. The annual reduction begins January 1 following one calendar year from your retirement date. The provisions that allow for double the natural death benefit for accidental death and for dismemberment end when you retire.
If you are covered under optional group life insurance, you may continue a portion of your coverage into retirement provided you, your spouse and/or your dependent children were covered during the 60 months preceding your retirement date. Accidental death and dismemberment coverage ends upon retirement. Optional life insurance amounts begin to reduce at age 65; coverage ends at age 80.
Imputed income is the value of life insurance in excess of $50,000 as determined by the Internal Revenue Service. The amount over $50,000 is subject to FICA tax and federal and state income taxes, and will be reflected on your year-end tax statement (W-2).
Virginia Sickness and Disability Program (VSDP)
If you participate in the Virginia Sickness and Disability Program (VSDP) and are involuntarily separated from employment while you are on short-term disability, you are eligible for WTA transitional severance benefits. These benefits are not available to VSDP participants on long-term disability. For more information, see DHRM Website.
VSDP Long-Term Care Plan
If you participate in VSDP, you are covered under the VSDP Long-Term Care Plan at no cost to you while you are actively employed. If you leave VSDP-covered employment or retire from a VSDP-covered position under WTA, you may elect to continue your coverage. You will be responsible for paying the premiums.
Note: If you elect the WTA cash severance benefit, VSDP long-term care coverage will continue during the period you are receiving severance payments at no cost to you for up to 12 months.
You have 60 days from the end of your severance period or retirement date to make this election. This option is not available after 60 days.
For more information, contact the Long Term Care Group, Inc. at 1-800-761-4057 or see VSDP Long-Term Care Plan.
Commonwealth of Virginia 457 Deferred Compensation and Virginia Cash Match Plans
If you participate in the Commonwealth of Virginia 457 Deferred Compensation and Virginia Cash Match Plans, you have the following options at the time of layoff:
- You may keep your funds in the 457 Plan. You continue to manage your investments. You cannot contribute to your plan unless you return to salaried or wage employment with an employer that offers the plan.
- You may request a rollover of your 457 Plan funds to the Virginia Cash Match Plan, an Individual Retirement Account (IRA) or other qualified retirement or tax-deferred savings plan.
- You may request your funds in a lump sum or as a periodic payment. You will be required to pay federal income taxes and state income taxes if you live in a state that taxes income.
- If you receive a payment before age 59½, there is no penalty for early withdrawal of funds from the 457 Plan. The Internal Revenue Service (IRS) may impose an additional 10 percent federal tax penalty for early withdrawal of funds from the Virginia Cash Match Plan.
Note: If you are electing the WTA cash severance benefit, you may not roll over your severance to the 457 Plan.