Who gets it
PEEHIP covers active and retired employees of Alabama public education institutions providing instruction in grades K-14 under the State Board of Education. Retirees' premiums are the base premium adjusted by a 'sliding scale' on years of service, set by the date of retirement. Handbook p. 35, PEEHIP; Ala. Code § 16-25A-1, 16-25A-8.1
PEEHIP retiree coverage is for TRS of Alabama retirees who were employed at retirement by a K-14 public education institution under the State Board of Education (Section 16-25A-1, 'Retired employee'). University retirees are not covered by this definition. Ala. Code § 16-25A-1; Handbook p. 35
The sliding scale
Percentages are of the state (PEEHIP) subsidy for individual coverage, for months more or less than 300 months (25 years). Retirees from Jan. 1, 2012 who are not on Medicare also pay an age penalty of 1% of the subsidy per year of age under the Medicare entitlement age at retirement, and a 'third tier' subsidy premium component; both stop on Medicare entitlement. The employer contribution may not exceed 100% of the total premium. PEEHIP Sliding Scale, Non-Medicare FY2026, slide 1; Medicare 2025, slide 7; Ala. Code § 16-25A-8.1(b)-(e)
| You retired | Under 25 years | Over 25 years | Age penalty, third tier |
|---|---|---|---|
| Before October 1, 2005 | Base premium, no sliding scale. | ||
| October 1, 2005 to Dec. 31, 2011 | +2% a year | −2% a year | No |
| January 1, 2012 or later | +4% a year | −2% a year | Yes, until Medicare |
Not on Medicare (FY2026)
Base premium $210; state subsidy $804; third tier $151.17. PEEHIP Sliding Scale, Non-Medicare FY2026, slides 1-4
| PEEHIP example | PEEHIP shows | Our math |
|---|---|---|
| Retired January 1, 2012, 33 years, age 62 | $256.65 | $256.65 |
| Retired October 1, 2005, 33 years, age 62 | $81.36 | $81.36 |
| Retired January 1, 2012, 12 years, age 60 | $819.45 | $819.45 |
On Medicare (2025)
Base premium $25; state subsidy $235. Plus your Medicare Part B premium. PEEHIP Sliding Scale, Medicare 2025, slides 1-3
| PEEHIP example (retired 2012 or later) | PEEHIP shows | Our math |
|---|---|---|
| 28 years | $10.90 | $10.90 |
| 22 years | $53.20 | $53.20 |
We have PEEHIP's 2025 numbers for Medicare retirees, not 2026.
2025 subsidy ($235) and the $25 base premium, labeled 2025.
PEEHIP Sliding Scale, Medicare 2025, slide 1; Non-Medicare FY2026, slide 3The health premium discount or penalty is set by service above or below 25 years. Examples only use whole years.
We count months.
PEEHIP Sliding Scale, Non-Medicare FY2026, slide 1; Ala. Code § 16-25A-8.1The lump-sum (PLOP) table and the health-premium age penalty use whole ages. The sources don't say how a partial year is counted.
Age in completed years on the retirement date.
Handbook p. 26; PEEHIP Sliding Scale, Non-Medicare FY2026, slides 1, 4, 6Medicare at retirement
If the retiree or a PEEHIP dependent is Medicare eligible, Medicare Parts A and B should be effective on the retirement date. Handbook p. 19, TRS Retirement Preparation Timeline
From the sources
- Retirees of K-14 public education employers can keep health coverage through PEEHIP. Your premium depends on when you retired and your years of service (the 'sliding scale').Handbook p. 35; Ala. Code § 16-25A-1, 16-25A-8.1
- If you retired on or after Jan. 1, 2012, the state's share of your premium drops 4% for each year under 25 years of service and rises 2% for each year over 25. Before Medicare, you also pay 1% of the subsidy for each year you retired before Medicare age, plus a 'third tier' amount ($151.17 a month in FY2026).PEEHIP Sliding Scale, Non-Medicare FY2026, slide 1; Ala. Code § 16-25A-8.1(c)-(e)
- PEEHIP's FY2026 examples for single non-Medicare coverage: 33 years, retired at 62 after 2011: $256.65 a month; 12 years, retired at 60: $819.45 a month.PEEHIP Sliding Scale, Non-Medicare FY2026, slides 4 and 6
- If you or a PEEHIP dependent is eligible for Medicare, have Medicare Parts A and B in effect on your retirement date.Handbook p. 19
Questions
What is the PEEHIP sliding scale?
Your retiree premium goes up for each year of service under 25 and down for each year over 25. The percentages are of the state's subsidy.
Is there an age penalty?
If you retired on or after Jan. 1, 2012 and aren't on Medicare, you pay 1% of the subsidy for each year you were under 65 when you retired. It stops when you're entitled to Medicare.
Do I need Medicare?
If you or a PEEHIP dependent is Medicare eligible, Medicare Parts A and B should start on your retirement date.
Do university retirees get PEEHIP?
PEEHIP's retiree definition covers people who worked for a K-14 public education employer under the State Board of Education. University retirees aren't in that definition.
Source: TRS Member Handbook, July 2026 edition (back cover "7-2026"), pp. 19, 35. Also: Code of Alabama Title 16, Ch. 25 and 25A; PEEHIP Sliding Scale, Non-Medicare FY2026; Medicare 2025; age 60 = 5%); PEEHIP Sliding Scale, Medicare 2025. Last reviewed .