Short answer: VRS doesn't run a health plan for retired teachers. If you retire with at least 15 years of service, it pays a tax-free health insurance credit of $4 a month for each year of service toward your own premium: $120 a month with 30 years. See buying service, which counts toward the credit, one more year and taxes. Estimate your pension in the calculator.
| Years of service at retirement | 10 | 14 | 15 | 20 | 25 | 25 yr 8 mo | 30 | 35 |
|---|---|---|---|---|---|---|---|---|
| Credit a month (up to your premium) | none | none | $60.00 | $80.00 | $100.00 | $100.00 | $120.00 | $140.00 |
Our calculation from the rule. The handbook's example: 30 years, up to $120 a month. Plan 1 Handbook p. 63, Health Insurance Credit Dollar Amounts
State law says the health insurance credit is $4 for each full year of service; the handbook just says $4 per year.
We count full years only: 25 years 8 months gets $100 a month, not $102.67.
Va. Code § 51.1-1401(A); Plan 1 Handbook p. 63, Health Insurance Credit Dollar AmountsWhat it pays for
Individual plans, coverage as a dependent on a spouse's plan, employer plans, Medicare Part B, dental and vision, prescription drug plans including Part D, long-term care insurance, long-term disability insurance, hospital or accident indemnity, cancer/specific illness supplements, medical discount programs. Not: health care sharing ministries, direct primary care/concierge, life insurance. Plan 1 Handbook p. 63-64, Qualifying Health Plans
Automatic when VRS deducts the premium; otherwise manage it in myVRS or file the Request for Health Insurance Credit (VRS-45). Plan 1 Handbook p. 64, Applying for the Health Insurance Credit
The health insurance credit is non-taxable and is not included in the 1099-R. Plan 1 Handbook p. 56, 1099-R Form
Other VRS groups (for comparison)
- State employees: $4.25 a year of service.
- Non-teacher school division employees: $1.50 a year of service.
- Non-teacher school division employees with $1.00 enhancement: $2.50 a year of service.
Your health coverage
School division retirees: ask your human resource office about retiree health insurance your employer may offer; some employers have VRS deduct premiums from the benefit. (The State Retiree Health Benefits Program is for state employees.) Plan 1 Handbook p. 53, Other Important Steps; p. 61, Coverage for School Division and Political Subdivision Employees
Eligible for Medicare at 65; apply at least three months before your 65th birthday. Plan 1 Handbook p. 61, Medicare Coverage
From the handbooks
- Health insurance credit: retire with at least 15 years of service credit and VRS pays a tax-free monthly credit toward your own health premiums. Teachers get $4.00 per year of service, no cap, up to the cost of your individual premium.Plan 1 Handbook p. 62-63, Health Insurance Credit
- Example: 30 years of service gives a credit of up to $120 a month ($4 x 30).Plan 1 Handbook p. 63, Health Insurance Credit Dollar Amounts
- The credit covers single coverage only, not the share for a spouse or dependents. It counts Medicare Part B and D, dental, vision, long-term care and several other plans, but not health care sharing ministries or concierge medicine.Plan 1 Handbook p. 62-64, Qualifying Health Plans
- Hybrid plan teachers also get the health insurance credit.Va. Code § 51.1-1401(A); Hybrid Handbook p. 69-70
- School division retirees should ask their own HR office about retiree health insurance. Some divisions have VRS deduct the premiums from the benefit.Plan 1 Handbook p. 61, Coverage for School Division and Political Subdivision Employees
- You become eligible for Medicare at 65. Apply at least three months before your 65th birthday.Plan 1 Handbook p. 61, Medicare Coverage
Questions
What is the VRS health insurance credit?
A tax-free monthly credit toward your own health insurance premium. Teachers who retire with at least 15 years of service get $4.00 for each year of service, with no cap, but never more than the premium.
How much is the health insurance credit with 30 years?
$120.00 a month ($4.00 × 30), if your premium is at least that much.
Does VRS provide retiree health insurance for teachers?
Not directly. Ask your school division's human resource office what retiree coverage it offers. The health insurance credit helps pay for it, or for another qualifying plan.
Source: VRS Plan 1, Plan 2 and Hybrid Retirement Plan Handbooks for Members, 07-2026 editions (VRSHB-1 07-2026, VRSHB-2 07-2026, HybridHB 07-2026), Plan 1 Handbook pp. 53, 56, 61, 62-63, 62-64, 63-64, 63, 64; Hybrid Handbook pp. 69-70. Also: Code of Virginia § 51.1-1401. Last reviewed .