Emeriti's Insurance First Option
Emeriti's Insurance First Option enables you to begin the Program initially with group insurance access and delay pre-funding for a period of years. If your institution has an existing retiree health plan, save money on benefit costs immediately by converting to Emeriti's group insurance options. If you don't have a plan, offer guaranteed issue group coverage immediately to your retiring faculty and staff.
Whether you have a retiree health benefit or not, Emeriti can customize the Insurance First 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 Insurance First Option for institutions with an existing retiree health plan:
- With a minimum 25% employer premium subsidy, access to full suite of Emeriti group insurance options
- With less than 25%, access to partial menu of Emeriti group insurance options
- Delayed employer pre-funding into defined contribution accounts (starting no later than fifth year)
- Implementation fee may be split (half at launch of insurance and half when pre-funding begins)
Benefits of Insurance First Option for institutions with an existing retiree health plan:
- Near-term savings through conversion to consortium-based group retiree insurance plans, delivered nationally by Aetna
- Positive effect on active health premiums when retirees are moved into separate coverage
- Potential reduction in FAS or GAS liabilities from insurance premium savings
- Some annual choice among a range of guaranteed issue medical, Rx, and dental plans for retirees
- Emphasis on preventive services
- Additional benefits when pre-funding begins: tax-favored employer/employee funding vehicles (VEBAs), discretionary
workforce management tool (Grantor Trust), and Reimbursement Benefit for out-of-pocket health expenses
Through the Insurance First Option, your insurance premium subsidy costs may be reduced. 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, end-of-career 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.
Parameters of Insurance First Option for institutions with no existing retiree health plan:
- With no employer premium subsidy, access to partial menu of Emeriti group insurance options
- Delayed employer pre-funding into defined contribution accounts (starting no
later than fifth year)
- Implementation fee may be split (half at launch of insurance and half when
pre-funding begins)
Benefits of Insurance First Option for institutions with no existing retiree health plan:
- Immediate access to consortium-based group retiree insurance plans, delivered nationally by Aetna
- Some annual choice among a range of guaranteed issue medical, Rx, and dental plans for retirees
- Portable benefits guarantee coverage wherever retirees live in the U.S.
- Emphasis on preventive services
- Additional benefits when pre-funding begins: tax-favored employer/employee funding vehicles (VEBAs), discretionary
workforce management tool (Grantor Trust), Reimbursement Benefit for out-of-pocket health expenses, and full suite of guaranteed issue group insurance plans
Through Emeriti's Insurance First Option, you accrue no accounting liabilities and your retiring employees will have guaranteed access to a range of Medicare supplement plans and Part D prescription drug plans underwritten by Aetna. When you begin pre-funding, employer costs are predictable, and 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.
