Reminder: Terminal Vacation & Benefits
In the past, some departments allowed terminating employees to extend their date of termination to some point beyond their actual last day of employment by utilizing vacation leave benefits. This was done so that the employee could remain a University employee and could, therefore, continue to receive State of Illinois benefits. It is not an acceptable HR or business practice to retain as active employees with the University any persons who are no longer providing services to the University.
According to the Department of Central Management Services (CMS), a “member’s coverage terminates at midnight of the date of termination of State employment.” Further, CMS language notes that “lump sum vacation and/or sick leave benefits are not to be considered when calculating the member’s last day of employment for insurance coverage purposes.”
The use of Terminal Vacation leave status in BANNER is not an acceptable option. All of the separation dates in the process must match. The separation date within the HR Front End as well as the last work date, termination date, and job end date in BANNER should all be the same – the last official day the employee performed service at the University.
Please be aware that the Benefits Service Center submits to CMS the last day of employment, which will also be the effective date for COBRA eligibility. It is important that terminating employees are informed that the terminal vacation they may take will not extend their benefits coverage.
Please verify that your termination/resignation procedures and communications reflect the University policy that is consistent with CMS rules. Questions regarding employment terminations/separations and benefit eligibility may be directed to: