Roots in the Mellon College Retirement Project

Launched by Professors Kenneth E. Cool and Linda Evers Cool, The Mellon College Retirement Project (MCRP) began as an empirical investigation seeking to understand how and if faculty retirement behavior has changed since the expiration, in 1994, of the federal law previously exempting higher education institutions from the Age Discrimination in Employment Act. Until that year, there had been a nearly universal tradition within colleges and universities that faculty members had to retire by or before age seventy.

The fundamental issues uncovered by the MCRP research were:

The research further suggested that retirement rates may be slowing on account of a variety of reasons, including changing attitudes toward retirement age and general wariness about national social insurance programs; but for many, an increasing anxiety about health care insurance was a strong factor for many in making the decision about when, or if, to retire.

So the Mellon College Retirement Project shifted its focus to the health security of retirees.

A number of demographic pressures will influence health care policy choices well into the 21st century, including:

Medicare, as we like to imagine it, is an encompassing safety net that protects all in old age; the reality of Medicare is somewhat less generous. While still a very solid foundation of social insurance for the acute care of citizens aged 65 and older, Medicare does not cover some existing and many emerging areas of health care, nor is it likely that Medicare, in its present form, will be able to keep pace with the increasing rate of health expenditures. Experts estimate that Medicare now accounts, on average, for slightly over 50% of a current retiree's total medical expenditures and that future beneficiaries may be paying more out-of-pocket and, very likely, a higher percentage of their pension income on health care in retirement.

At the same time, the provision of employer-sponsored supplemental health insurance is in decline. During the past decade, the practice of many for-profit employers has been to shift more of the insurance burden onto retirees through rising co-payments and deductibles; and in some instances, for-profit companies have eliminated post-retirement coverage altogether for future generations of retirees. Research among non-profit liberal arts colleges suggests similar trends in the cost shifting of retiree health benefits.

The MCRP sought to find possible solutions to these critical policy questions, and began to lean toward the option of consortial pooling of the insurance needs, thinking that there could potentially be strength and security in larger insurance pools than in the dispersed, small populations of individual campuses. It might also give older employees an attractive retirement incentive, provide a more affordable retirement benefit, and allow for a disciplined investment program similar to pension programs to save for future medical needs.

The MCRP brought together experts from a wide range of professional fields to explore potential consortial approaches for providing supplemental health insurance for retiring faculty and staff of national liberal arts colleges, and drew up a plan, based on a defined contribution model and a program of retiree health insurance options based on the foundation of Medicare, to make it happen. This became the Emeriti Program.

After rigorous evaluation, Emeriti selected two nationally prominent providers in the retirement services field to deliver the program's services. Fidelity Investments and Aetna Life Insurance are both strategically aligned with the Emeriti vision of a new paradigm for retiree health benefits, and they have considerable depth of experience in delivering services such as trust administration, investment options, insurance plans, recordkeeping services, and customer support. The Emeriti Program is managed by Emeriti Retirement Health Solutions' national office and delivered by Fidelity and Aetna.

Declared Members in the Emeriti Program

Institution	State
Baylor College of Medicine	TX
Colorado College	CO
Connecticut College	CT
Denison University	OH
DePauw University	IN
Dickinson College	PA
Emeriti Retirement Health Solutions	NY
Five Colleges, Inc.	MA
Gettysburg College	PA
Gordon College	MA
Hampden-Sydney College	VA
Harvey Mudd College	CA
Haverford College	PA
Illinois Wesleyan University	IL
Ithaca College	NY
Kalamazoo College	MI
Kenyon College	OH
Lycoming College	PA
Marlboro College	VT
Mills College	CA
Northwood University	MI
Pepperdine University	CA
Point Loma Nazarene University	CA
Reed College	OR
Saint Mary's College	CA
Saint Mary's College	IN
Sarah Lawrence College	NY
Seattle Pacific University	WA
Sewanee: University of the South	TN
Shenandoah University	VA
Southern Methodist University	TX
St. Olaf College	MN
The Andrew W. Mellon Foundation	NY
The Georgia Foundation for Independent Colleges	GA
Tiffin University	OH
Trinity University	TX
Union Theological Seminary	NY
University of Evansville	IN
University of Indianapolis	IN
University of the Pacific	CA
University of San Francisco	CA
University of the Incarnate Word	TX
University of the Sciences in Philadelphia	PA
Ursinus College	PA
Washington and Lee University	VA
Wheelock College	MA
Whittier College	CA

The Emeriti Program emerged from a three-year, in-depth look at the issues related to retirement and retiree health care costs in higher education, sponsored by The Andrew W. Mellon Foundation. This study, the Mellon College Retirement Project, was headed up and conducted by Dr. Linda Evers Cool and Dr. Kenneth E. Cool.

Linda Evers Cool

Linda Evers Cool is Founding Director of Emeriti Retirement Health Solutions. She served as lead investigator of a study of faculty retirement behavior and institutional retirement incentive policies at national liberal arts colleges since the lapse of mandatory retirement in higher education in 1994. Dr. Cool is also Professor of Anthropology at Union College. Previously, she served as Vice President of Academic Affairs and Dean of the Faculty at Union College and, earlier, as Associate Academic Vice President at Marist College.

Her scholarly interests have focused on regional identity and politics from a cross-cultural perspective, with a special interest in the role of the elderly and their negotiations of power and identity in transitional societies. Her gerontological scholarship has been published in the Anthropological Quarterly, the International Journal of Aging and Human Development, the Journal of Social History and a number of edited volumes focusing on gerontology in the social sciences. She has conducted fieldwork among the Corsican ethnic population in France, the Portuguese immigrant community in the United States, and the retiring faculty cohort at national liberal arts colleges. Dr. Cool was a founding member and past president of the Association for Anthropology and Gerontology.

She was awarded the bachelor's degree in anthropology from Bryn Mawr College and completed her Ph.D. in the same field at Duke University. She received support from the National Science Foundation, the Social Science Research Council and the National Endowment for the Humanities for her graduate and post-graduate research.

Kenneth E. Cool

Kenneth E. Cool is President of Emeriti Retirement Health Solutions. He served as senior collaborator on a concurrent research investigation of faculty retirement behavior and institutional retirement incentive policies at national liberal arts colleges. Previously, he was Director of Academic Planning and Program Support at Vassar College for twelve years, with responsibilities at the intersection of academic affairs, fund raising and financial management. At Vassar, Dr. Cool coordinated strategic planning efforts for the first $200 million capital campaign. Previously, he performed similar administrative responsibilities in fund raising, sponsored research and institutional planning at Santa Clara University.

His early career at Stanford, University of New Mexico, and Santa Clara focused on teaching and scholarship in foreign languages and comparative literature. He received a Fulbright graduate fellowship and a Mellon post-doctoral fellowship for his work in those fields. His literary scholarship has been published in the Journal of Medieval and Renaissance Studies and the Stanford French Review. Dr. Cool received his bachelor's degree in French from Davidson College and was awarded the Ph.D. in romance languages and comparative literature from Duke University.

Timothy A. Hultquist, Board Chair
Advisory Director (retired)
Morgan, Stanley & Company (CT)

Mary Patterson McPherson, Vice Chair
Executive Officer
American Philosophical Society (PA)

John David Alexander†
President (emeritus)
Pomona College (CA)

Wayne Anderson
President
Associated Colleges of the South (GA)

John H. Biggs
Chief Executive Officer (retired)
TIAA-CREF (NY)

Glenda K. Burkhart
Independent Human Resources Consultant
Fortune 500 Companies (NY)

Kenneth Cool
President
Emeriti Retirement Health Solutions (NY)

Ronald G. Ehrenberg
Director, Cornell Higher Education Research Institute
Cornell University (NY)

Hanna H. Gray
President (emerita)
University of Chicago (IL)

Earl Lewis
Provost and Executive Vice President for Academic Affairs
Emory University (GA)

Paul J. Mason
Financial Services Consultant (DC)

T. Dennis Sullivan
President
The Church Pension Group (NY)

EX OFFICIO

David Anderson (ex officio),
Chair, Advisory Council
President
St. Olaf College (MN)

Linda Cool (ex officio)
Founding Director and Corporate Secretary
Emeriti Retirement Health Solutions (NY)

† Deceased

David Anderson, Council Chair
President
St. Olaf College (MN)

William Detwiler
Associate Vice President for Business Services
Southern Methodist University (TX)

Paul Fronstin
Director of the Health Research and Education Program
Employee Benefit Research Institute (DC)

Julia McCallin
Associate Vice President for Human Resources
California Institute of Technology (CA)

Edwin McFarlane
Treasurer
Reed College (OR)

Carol Ann Mooney
President
St. Mary’s College (IN)

James C. Moore
Chief Human Resources Officer (retired)
Pepperdine University (CA)

Thomas Nycum
Vice President, Business and Finance (emeritus)
Colorado College (CO)

John Palmer
University Professor
Dean (emeritus) of The Maxwell School
Syracuse University (NY)
Former Public Trustee, Medicare and Social Security Trusts

Annette Parker
Vice President and Treasurer
Dickinson College (PA)

Seth Patton
Vice President, Finance and Management
Denison University (OH)

Martha Peugh-Wade
Assistant Vice President for Human Resources
University of San Francisco (CA)

EX OFFICIO

Kenneth Cool (ex officio)
President
Emeriti Retirement Health Solutions (NY)

Linda Cool (ex officio)
Founding Director and
Secretary to the Advisory Council
Emeriti Retirement Health Solutions (NY)

Kenneth Cool, President
Ken holds a BA from Davidson College and a Ph.D. from Duke University. Early in his career, he taught foreign languages and comparative literature at Santa Clara, Stanford, University of New Mexico. He served in administrations of Santa Clara and Vassar College, where he was director of academic planning prior to the launch of the Mellon College Retirement Project and the formation of the Emeriti Program.
kcool@emeritihealth.org
tel 845.567.6666; fax 845.567.4844
or toll-free: tel 866.685.6565; fax 866.686.6565

Barbara Perry, Vice President, Marketing and Membership
Barbara holds a BA from Farleigh-Dickinson University and did graduate work at Georgetown University. Barbara was a senior marketing and sales person at TIAA-CREF for more than 20 years, and had responsibility for the regional office in the Great Lakes region.
bperry@emeritihealth.org
tel 845.567.6666; fax 845.567.4844
or toll-free: tel 866.685.6565; fax 866.686.6565

Deb Ondo, Assistant Vice President of Communications
Deb holds the BA from Vermont College of Norwich University. Prior to joining Emeriti, she was the Director of Communications for a national nonprofit in NYC. Deb also has twenty years of experience in television marketing, promotion, and production, most recently as Creative Services Director at NECN in Boston. She is also a documentary filmmaker and creative writer.
dondo@emeritihealth.org
tel 845.567.6666; fax 845.567.4844
or toll-free: tel 866.685.6565; fax 866.686.6565

Linda Cool, Founding Director
Linda holds a BA from Bryn Mawr College and a Ph.D. from Duke University. She has been a faculty member at Santa Clara, Marist, and Union. She was also associate academic vice president at Marist and provost at Union. She led the research launch of the Mellon College Retirement Project and has been engaged in the formation of the Emeriti Program. She works with Emeriti part-time and remains a full-time professor at Union College.
lcool@emeritihealth.org
tel 845.567.6666; fax 845.567.4844
or toll-free: tel 866.685.6565; fax 866.686.6565

Roger Montgomery, Vice President of Finance
Roger holds the BS from National University. Prior to joining Emeriti, he was Director of Ceded Prorata Reinsurance at American International Group. Roger has also worked as a consultant, CFO and accountant for a number of financial and insurance-based institutions.
rmontgomery@emeritihealth.org
tel 845.567.6666; fax 845.567.4844
or toll-free: tel 866.685.6565; fax 866.686.6565

Russell Galer, General Counsel
Russ holds a BA from Yale University and a JD from New York University School of Law.  He has worked in the employee benefits field throughout his career.  Prior to coming to Emeriti, he served as the lead counsel on pension-related issues for the Investment Company Institute, legal counsel at Sun Life of Canada (U.S.), and a staff attorney at the Pension Benefit Guaranty Corporation.  He also has worked on pension policy at the Organization for Economic Co-operation and Development (OECD).  Mr. Galer works for Emeriti on a part-time basis and maintains an international consulting practice advising governments and international organizations on pension, social security and related financial market policy and law.
rgaler@emeritihealth.org
tel 845-674-7515; fax 845.567.4844
or toll-free: tel 866.685.6565; fax 866.686.6565

Emeriti's Senior Advisors - An Important Peer-to-Peer Resource

Our team of Senior Advisors is an invaluable resource as you consider the Emeriti Program for your institution. All of our Senior Advisors have worked at higher education institutions, either in senior finance or human resources capacities. Several also hold faculty positions. These experienced and respected individuals are now associated with the Emeriti Program and are available to talk with you about your institution’s current retiree health arrangement, so that you may better understand how the Emeriti Program can meet your needs.

Paul Aslanian was Vice President for Finance and Planning at Swarthmore College for 7 years, after having been Chief Financial Officer at Macalester College for 21 years. He now teaches Economics at Macalester College (email: paslanian@emeritihealth.org).

Karen Bradley was in the Human Resources area at New York University for 38 years, including 14 years as Assistant Vice President of Human Resources (email: kbradley@emeritihealth.org).

Larry Broomall retired after 19 years at Washington and Lee University as its Vice President for Finance and Treasurer (CFO). He is also former President of EACUBO and board member for NACUBO (email: lbroomall@emeritihealth.org).

Keith Groty was Chief Human Resources Officer at Michigan State University for 30 years and is a past president of CUPA. He is presently Professor of Labor and Industrial Relations and Assistant Vice President for Human Resources - Emeritus at Michigan State University (email: kgroty@emeritihealth.org).

Linda Herkenhoff previously served as Director of Human Resources for Stanford University. She is now a full-time faculty member in the Graduate School of Business and Economics at Saint Mary's College of California (email: lherkenhoff@emeritihealth.org).

Grazina (Chris) Keeley was Associate Vice President for Human Resources at the University of Chicago for 7 years. Prior to that, she was Director of Human Resources Administration at Indiana University-Purdue University at Indianapolis (email: ckeeley@emeritihealth.org).

Emeriti is pleased to work collaboratively with benefits consultants in a variety of ways. When institutions retain outside consultants, we are often asked to brief the consultant on the basic features of the Emeriti Program, work through plan design decisions and funding scenarios, as well as implementation and communications issues.

Emeriti has also worked directly with consultants to help you gain a good understanding about the Emeriti model, program features, plan design flexibilities, consortium services and evaluation tools. In this way, you can keep your clients up to date on the innovative comprehensive solution Emeriti has developed:

If you would like to use a copyrighted Emeriti slide deck and be kept informed of Emeriti’s latest plan enhancements and changes, we would encourage you to sign a simple agreement that gives you access to updated materials and asks you to bring Emeriti representatives into the discussion when your client shows an interest in the Emeriti program. We have met with consulting firms to provide an initial overview on Emeriti before signing the consultants’ agreement. In several cases, the consultant has subsequently invited Emeriti on-campus to continue the dialogue about retiree health care benefits with the plan sponsor.

Emeriti is also working with our business partners, Fidelity Investments and Aetna Life insurance Company to conduct webinars reaching out to the consultant community on topics ranging from changes in Medicare, retiree health care plan designs, and resolving unfunded liability problems, to the impact of certain benefits on institutional renewal and other workforce management issues in higher education.

We invite you to learn more about the Emeriti Program and how we can work with you in the best interests of your clients.

Emeriti® Retirement Health Solutions was created to provide a comprehensive and sustainable program for retiree health care coverage. The need comes from the changing dynamics of retirement behavior in the higher education community, as well as a rapidly aging population and ever-increasing health insurance costs. It offers a nationally available, group medical insurance program that complements Medicare and is supported by tax-advantaged health accounts. The innovative solution, developed out of a three-year study supported by The Andrew W. Mellon Foundation, is managed by Emeriti and is delivered in close collaboration with two organizations nationally prominent in the retirement services field – Fidelity Investments® and Aetna Life Insurance Company®.

Collective Buying Power Leverages Resources

Emeriti is a nonprofit consortium of, by, and for colleges, universities and higher education-related, tax-exempt organizations. By banding together many organizations large and small, Emeriti leverages purchasing power, generates programmatic advantages and achieves administrative efficiencies in providing pre-funding of retiree medical costs by employers and employees, and a nationwide insurance program with a range of plans and costs. Emeriti offers institutions a comprehensive outsourced solution, providing approved model plan and trust documents, helping member institutions design plans to meet their needs, providing prospective and transition funding modeling, assisting with key administrative services and regulatory support, designing/updating benefits, negotiating premium rates and fees, and supplying ongoing education and communications. Emeriti’s collaborative goals are not only to provide high-quality retiree health care products and services, but also to improve educational resources for making health care an integral component of retirement planning. It is this collaborative platform that makes Emeriti a viable paradigm.

Innovative Trust Structure Delivers Tax-Advantaged Savings and Flexible Disbursement Options

A key component of the Emeriti solution is the pre-funding mechanism – the Emeriti Health Accounts for which Fidelity Investments provides recordkeeping and shareholder services. By using a defined contribution approach, the institution and the employee make contributions which are invested in a strategically designed portfolio, held within highly tax-efficient trusts called Voluntary Employees’ Beneficiary Associations (VEBAs). As opposed to the widely used defined benefit approach, this innovative method maximizes budgetary predictability and cost control for institutions, while limiting future FAS 106/ GAS 45 liabilities. The Emeriti Health Accounts allow the institution and the employee to save toward funding future health insurance plan options at various levels of coverage and cost. Upon enrollment in Medicare, the retired employee pays for health insurance and other qualifying medical expenses from the accumulated funds in the Health Account. The Emeriti Reimbursement Benefit offers a tax-free way for retirees to pay for qualifying medical expenses not covered by insurance. In addition, employees who retire early (starting at age 55), or experience a catastrophic event, can also use the Reimbursement Benefit for certain qualified medical expenses. Emeriti offers an additional funding device called the Grantor Trust for such workforce management objectives as recruitment, retention, and retirement.

Custom-Built Plan Design Ensures Catastrophic Protection and Nationally Available Benefits

The third core component of the Emeriti Program is a comprehensive and highly competitive selection of group health insurance plans. The Emeriti Health Insurance Plan Options, underwritten by Aetna Life Insurance Company* (see over), are configured with higher education retirees in mind. The options offer catastrophic protection, enhanced prescription drug benefits, preventive care, foreign travel emergency coverage, national access, annual choice among plans, and optional dental insurance. The Emeriti Health Insurance Plan Options build on the foundation of Medicare. Retirees design their own plan from a menu of choices, for the type and level of coverage that best meets their needs for the year. They can then choose a different combination for the following year. Two of the medical plans supplement Medicare Parts A and B. The other two medical plans are Medicare Advantage (Part C) Private Fee-for-Service (PFFS) plans. All coverage options include prescription drugs, with a choice of three Medicare-approved Part D options. Dental insurance is offered as an addition to medical and/or drug benefits. Health insurance is available for pre-65 dependents of enrolled retirees.

* Aetna provides medical coverage for institutions in 48 states and the District of Columbia and their retirees who reside in any of the 50 states and the District of Columbia. As a national PDP, Aetna also provides drug coverage for institutions in all 50 states and the District of Columbia and their retirees residing throughout the US. HealthPartners provides comprehensive medical and prescription drug coverage to Minnesota institutions and their retirees who reside in Minnesota. Emeriti will select a carrier to provide medical coverage for institutions in new Mexico and their retirees who reside in new Mexico.

There are two important new additions to the Emeriti Program:

1. Pre-65 Retiree Group Health Insurance

NOTE: This will be an option for institutions to elect.

Requests for this new coverage came from institutions of all types and sizes, each seeking an affordable, sustainable health insurance solution for early retirees caught in the gap between COBRA coverage and Medicare eligibility.

Pre-65 retiree coverage is an optional additional benefit for Emeriti Consortium members. It will not be available as a stand-alone product, and requires that the sponsoring employer plan also participate in post-65 insurance options. Coverage will be underwritten by Aetna Life Insurance Company (Aetna) and will be available to Emeriti member institutions in 48 states and the District of Columbia. Pre-65 options will not be available in 2009 for institutions located in Minnesota and New Mexico.

Aetna is underwriting the fully insured group product, and Fidelity Investments is providing record-keeping services. The pre-65 solution has been designed with the benefits advice of PricewaterhouseCoopers and the legal counsel of McGuireWoods.

For more information, read or download our Pre-65 Retiree Group Health Insurance leaflet.

2. Automatic Enrollment

NOTE: This will be an option for institutions to elect.

Most member institutions allow participants to make voluntary contributions to their Emeriti Health Accounts; however many individuals do not take advantage of this tax-favored benefit. By electing auto-enrollment, the institution can decide when the benefit begins for eligible individuals, and determine the amount of the contribution. All individuals who meet the institution’s age and/or service requirements will be automatically enrolled in the benefit unless they opt out.

For more information, call Emeriti at 845-567-6666.

What are your next steps toward becoming a member of the Emeriti Program and adopting an Emeriti Plan for your faculty and staff? There are three levels of engagement, designed as a collaborative experience that allow you to fully understand how the Emeriti Program will benefit your institution. Please note that you may choose to declare membership at any time during the process.

Letter of Interest:

A Letter of Interest is a non-binding statement of interest signed by the appropriate institutional decision maker stating a general interest in the Emeriti Program.

Benefits: The institution receives periodic follow-up communications, a newsletter about the Emeriti Program development and enhancements, invitations to upcoming events and teleconferences and various reports and surveys.

Goal: To learn more about the Emeriti Program and to keep abreast of new products and services and enhanced tools for evaluating the conditions of consortial membership.

Letter of Intent:

A Letter of Intent is a non-binding statement of intent to engage in an in-depth evaluation of the Emeriti Program with the goal of reaching a decision about membership in the Emeriti consortium. It is a signal that the institution is willing to commit the time and resources necessary to engage in a series of action steps to evaluate funding considerations, plan design, transition issues and implementation strategies. In turn, Emeriti allocates considerable resources in support of the decision-making process.

Benefits: The institution is assigned a dedicated Emeriti staff member to develop an action plan and a customized timeline in order to undertake a thorough evaluation of the conditions of membership in the Emeriti Program. Emeriti resources include prospective and transition funding tools, periodic teleconferences with the campus champion and evaluation team, on-campus meetings with campus constituencies, decision support materials for senior management, development of a formal proposal, guidance on final plan documents and assistance with program implementation.

Goal: To conduct a thorough evaluation of the Emeriti Program and make a decision about membership in the Emeriti consortium.

Declaration of Program Membership:

A Declaration of Membership is a contractual obligation to proceed with membership in the Emeriti Consortium and pay the implementation fee. The implementation process begins with the submission of final plan documents and agreement upon a timeline for launching the various components of the institution’s Plan. Emeriti provides a comprehensive, outsourced retiree medical benefits program.

Benefits: The institution receives support for implementation of its Plan, training of administrators on the record-keeping system, and education and enrollment of participants. Thereafter, the institution continues to benefit from Emeriti’s outsourced administrative services, enhanced products and services, continuing education of participants, regular newsletters and other updates and periodic evaluation of program effectiveness.

Goal: To implement the institution’s Emeriti Plan and to educate participants about and enroll them in all applicable features of the retiree medical benefits program.

Please call Stephanie Wajda at 866-685-6565 or email swajda@emeritihealth.org to get started.