Emeriti's Incremental Pre-Funding Option
Emeriti's Incremental Pre-Funding Option enables you to begin the Program at a reduced contribution level today, with access to all Emeriti benefits as your institution ramps up to Emeriti's benchmark funding over a period of years.
Whether you have a retiree health benefit or not, Emeriti can customize the Incremental Pre-Funding Option to meet your institution's cultural and financial needs.
My institution has a retiree health plan for employees.
You may be finding the annual costs increasingly unaffordable today and the mounting accounting liabilities unsustainable into the future. Aging workforces, their rising health care utilization, and their longer life spans will inevitably affect long-term benefit expenses. Even access-only health plans have growing costs, especially when linked to the active insurance pool, due to the greater health care expenses of older individuals. Many institutions are reducing employer contributions to and/or coverage provisions for their retiree health insurance, just as the strategic value of this benefit has become more central to the retirement decision of older faculty and staff.
Parameters of Incremental Pre-Funding Option for institutions with an existing
retiree health plan:
- Begin with minimum employer funding of $10 per participant per month
- Ramp up to Emeriti's benchmark funding standard by fifth year
- Offer full suite of Emeriti group insurance options
- Gain immediate access to pre-funding vehicles (employer and employee VEBA Trusts and Grantor Trust)
- Provide immediate access to Emeriti's Reimbursement Benefit for out-of-pocket health expenses
Benefits of Incremental Pre-Funding Option for institutions with an existing
retiree health plan:
- Reduce FAS/GAS liabilities for defined benefit promise
- Provide affordable and predictable employer cost basis
- Provide tax favored employer/employee funding vehicles (VEBAs)
- Make special allocations through Grantor Trust for additional end-of-career workforce needs
- Create sustainable benefit for long-serving employees
Through the Incremental Pre-Funding Option, employer costs for the benefit are predictable and sustainable. With defined contribution pre-funding, you accrue no accounting liabilities and will gradually reduce the liabilities of legacy plans, depending on your contribution strategy. Your retiring employees will have guaranteed access to a range of Medicare supplement plans and Part D prescription drug plans underwritten by Aetna. Your younger employees will have the opportunity to build assets, through institutional and individual contributions into Emeriti's tax-advantaged health savings accounts managed by Fidelity Investments.
My institution does not have a retiree health plan for employees.
You may feel that you cannot add a new benefit in this environment; and yet, the continuing salaries, health insurance, and other types of compensation for even a small number of your highest earning older employees may cost more than the annual outlay for participation in Emeriti's defined contribution retiree health plan on behalf of all benefits-eligible employees.
The Incremental Pre-Funding option allows you to ramp up employer contributions over a period of time, while providing
immediate access to Emeriti insurance options and additional benefits.
Incremental Pre-Funding Parameters for institutions without an existing retiree
health plan:
- Begin with minimum employer funding of $10 per participant per month
- Ramp up to Emeriti's benchmark funding standard by fifth year
- Offer full suite of Emeriti group insurance options
- Gain immediate access to pre-funding vehicles (employer and employee VEBA Trusts and Grantor Trust)
- Provide immediate access to Emeriti's Reimbursement Benefit for out-of-pocket health expenses
Incremental Pre-Funding Benefits for institutions with no existing retiree health plan:
- Create no accounting liabilities
- Reduce high end-of-career compensation costs
- Provide tax favored employer/employee funding vehicles (VEBAs)
- Make use of Grantor Trust as a workforce management tool for recruitment, retention, and retirement
- Help facilitate institutional renewal
- Provide cost-effective health care security for long-serving employees
Through the Incremental Pre-Funding Option, employer costs are predictable and sustainable, and you accrue no accounting liabilities. Your retiring employees will have guaranteed access to a range of Medicare supplement plans and Part D prescription drug plans underwritten by Aetna. Your younger employees will have the opportunity to build assets, through institutional and individual contributions into Emeriti's tax-advantaged health savings accounts, managed by Fidelity Investments.
To receive a customized analysis of insurance cost savings and minimum pre-funding amounts,
call 1-866-685-6565, or email us at newoptions@emeritihealth.org.
