Learn & Plan
The Emeriti Program provides a way for you to start saving now in preparation for health care expenses in retirement.
Updates to the Patient Protection and Affordable Care Act (PPACA) will include:
The Medicare Coverage Gap Discount Program will continue to provide manufacturer discounts on brand name drugs to Part D beneficiaries who reach the Coverage Gap and are not already receiving “Extra Help.” A 50% discount on the negotiated price of preferred and non-preferred brand drugs (excluding the dispensing fee) will be available from manufacturers that have agreed to provide the discount. All covered (formulary) brand drugs on the Aetna Medicare formulary for your respective plan will be part of this discount program. This manufacturer discount is applied first to the total cost of your prescribed brand drug before you and the PDP plan pay your respective share of total drug costs at a retail pharmacy or through Aetna’s mail order service. The amount that the pharmaceutical company pays, in addition to the amount that the members pays, contributes towards the True out of Pocket (TrOOP) amount. If your PDP plan has the Open formulary and already includes coverage for brand drugs in the Gap, the 50% discount will further reduce your cost share obligations. If your PDP plan has the Open formulary but does not include coverage for brand drugs in the Gap, the 50% discount will also reduce your cost share obligations. If your PDP plan has the Standard formulary and offers no coverage for brand drugs in the Gap, the 50% discount will only apply to those brand drugs available on Aetna’s formulary.
If you elect the Rx Low Plan, and are not already receiving “Extra Help,” your cost share in the Coverage Gap can be no more than 72% for covered Part D generic drugs offered by the standard Part D benefit. Only the Rx Low Plan is being revised to reflect this required change by Medicare (CMS). The 72% cost share does not apply to the Rx Mid (and Rx Mid-High*) and Rx High Plans that already include generic drug benefits in the Coverage Gap.
As required by CMS, Aetna plans will continue paying 2.5% of the total brand cost in the Coverage Gap for the Rx Low and Rx Mid Plans. This is in addition to the 50% discount that pharmaceutical manufacturers are paying. Since the Rx High Plan (and Rx Mid-High Plan1) already include brand drug benefits during the Coverage Gap, this cost share does not apply to those plans.
The ability to pay for medical costs in retirement is one of society's largest and most complex issues. Increases in health care costs have consistently outpaced the general inflation rate as measured by the Consumer Price Index (CPI). In addition, people are also living longer, which tends to increase individual medical costs. Because of these high costs, many employers are cutting back their health insurance subsidies for retirees.
This poses a problem to many retirement-eligible individuals who want to retire, but have drastically underestimated what health care will cost and how access to health care will be determined. The Emeriti Program provides a way for you to start saving now in preparation for such health care expenses in retirement.
Within the academy, retirement plans, tax-deferred savings and Social Security benefits were generally intended to replace 70%–80% of current income. Rising health care costs have pushed the savings requirement even higher.
Medicare Part A and Part B cover just over 50% of the average retiree's total health care expenses. Benefits are limited—particularly for catastrophic illnesses—and coverage restrictions may expose individuals to potentially devastating medical expenses1. The Medicare Part D prescription drug benefit has been added to Medicare to cover prescription drugs, but individuals will still have to pay a substantial share of the total costs. When you take into account premiums, deductibles, coinsurance and copays, plus other out-of-pocket expenses, quite a lot may not be covered by Medicare.
*VA/Tricare 14%, Medicaid 2%, Other Private 3%, Other Public 1% Source: The Employee Benefit Research Institute (EBRI) 2007 Medical Expenditure Panel Survey.
As a result, you may need to pay for close to half of health care expenses for you and your dependents from your own personal resources. And if the pressures on Medicare require it to reduce benefits, your share may increase. It's important to start saving as early as possible, because the longer you wait, the more you may need to save.
The Center for Retirement Research at Boston College (CRR) estimates that the expected present value of lifetime uninsured health care costs for a married couple age 65 is about $197,0002 - including insurance premiums, out-of-pocket costs, and home health costs and excluding nursing home care.
1The Employee Benefit Research Institute (EBRI) estimates, Issue Brief No. 295, July 2006, Savings Needed to Fund Health Insurance and Health Care Expenses in Retirement, by Paul Fronstin, EBRI.
2The Employee Benefit Research Institute (EBRI) 2007 Medical Expenditure Panel Survey.
In order to make the best choices for your needs, it is important that you understand what choices you have and how Medicare operates. Below is a brief description of how each part works:
The reality is that although Medicare is a comprehensive framework for health security in retirement, it doesn't cover everything, nor was it ever intended to do so. You should consider buying supplemental insurance that helps you with the costs that Medicare does not pay. You should also think carefully about other out-of-pocket, health-related expenses beyond insurance coverage and factor them into your overall retirement budget. On average, Medicare is likely to pay only about half of your medical costs in retirement *.
To learn more, read or download Emeriti's A, B, C, Ds of Medicare booklet designed to help you to understand how Medicare works and what your share of your health care costs may be.You may also find it helpful to visit the Medicare Rights Center.
* The Employee benefit Research Institute (EBRI) 2006 estimates from the 2003 Medical Expenditure Survey.
Each fall, Emeriti representatives arrive on member institution campuses to deliver workshops designed to update, educate and inform. Typically, the presentations provide a brief overview of the Program, outline Program and benefit updates, and allow for participant questions. The workshops are about an hour and a half in length. Look for announcements from your institution about when and where these workshops will be held on your campus.
In this section, you can review the presentations at your convenience. Just click on the appropriate page or link below to view the PDF of the presentation most relevant to you.
View presentations for:
Below are links to download important forms you may need throughout your coverage with Emeriti.
For Retirees' Health Care, a Balancing Act. Article from the Chronicle of Higher Education, September 2006.
Emeriti is a non-profit, tax-exempt organization dedicated to the delivery of retiree health security to employees of colleges, universities, and education-related non-profit organizations through the auspices of the Emeriti Consortium. As a consortium for retiree health benefits, Emeriti offers a common infrastructure to member institutions and their participants and thereby generates cost efficiencies and provides integrated services across many member organizations in all parts of the country. The Emeriti Program uses VEBA Trusts to set aside funding for and then pay out health care benefits in retirement in a highly tax-efficient manner.
The Emeriti Program began as an empirical research project on retirement strategies and involved survey and interview research at a number of higher education institutions nationwide. A study group of educational leaders and practitioners from the benefits industry then devised the core programmatic features of the Emeriti Program. Generous support from The Andrew W. Mellon Foundation and The William and Flora Hewlett Foundation helped underwrite the early development and implementation of the Emeriti Consortium.
VEBA stands for Voluntary Employees Beneficiary Association, which has been a longstanding provision within section 501(c)(9) of the IRS code since 1928. VEBAs can be used in a very tax-efficient way to meet a variety of welfare (e.g. health care) benefit expenses. Emeriti uses the VEBA Trust specifically as a funding and payment vehicle for retiree health care costs.
In the Emeriti Program, there are two VEBA Trusts: one trust holds employer contributions, and a second trust holds employee contributions.
For non-profit organizations, employer contributions on behalf of eligible participants go into the employer VEBA Trust on a pre-tax basis. Participant contributions deposited into the employee VEBA Trust are made on an after-tax basis.
Once dollars are held within the VEBA Trust accounts, earnings on both employer and employee accumulations are exempt from taxation.
At disbursement, the assets held in the Trusts can be used on a tax-free basis to pay premiums due for Emeriti health insurance and obtain reimbursement for qualified medical expenses (the Emeriti reimbursement benefit).
Unlike distributions from 403(b) retirement plans, which are taxed as income regardless of how they are spent, the distributions made from the VEBA Trust accounts are not subject to taxation.
Emeriti combines three essential elements to form a comprehensive solution to retiree health care:
In addition, Emeriti offers two other important consortial advantages:
As the convening entity for the Program, Emeriti provides a model plan document that each Member Institution adopts through a series of key design choices for its distinctive Emeriti Plan, whose provisions define the specific benefits available to eligible employees.
The Emeriti Consortium oversees benefit delivery through arrangements with highly regarded, national service providers. TIAA-CREF provides accumulation record-keeping services, investment options, and trust administration for the Emeriti Health Accounts. Savitz provides disbursement record-keeping services, insurance enrollment and reimbursement benefit administration. Aetna provides fully insured Emeriti Health Insurance Options in 48 states and the District of Columbia and also handles COBRA administration; HealthPartners provides retiree coverage in Minnesota.
Emeriti, the Emeriti Program and the Emeriti plans formed under it, are subject to regulation under the securities, tax, and pension law, including, principally among them, the Investment Advisors Act of 1940 enforced by the Securities and Exchange Commission (SEC), the Employee Retirement Income Security Act of 1974 (ERISA) enforced by the Department of Labor (DOL), and various provisions of the Internal Revenue Code enforced by the Internal Revenue Service (IRS), as well as various state insurance department regulations, various state corporate securities requirements, and the terms of the Age Discrimination in Employment Act (ADEA). Insurance benefits, including Part D pharmaceutical benefits among other benefit provisions, are subject to state insurance law regulations and the oversight of the Centers for Medicare and Medicaid Services (CMS).
Each employer’s Emeriti Plan, after its establishment, obtains tax-qualified approvals from the IRS for the VEBA trusts formed under its Plan.
Emeriti has obtained two no-action letters from the SEC enabling the Emeriti consortium to offer its program exclusively to colleges, universities, primary and secondary schools, educational associations, teaching hospitals and medical organizations, research and cultural institutions, libraries and museums, and charitable foundations. A fact sheet is available that defines in greater detail the characteristics of eligible tax-exempt organizations. As a result of tax code requirements, organizations must meet a 50-person threshold of benefits-eligible employees and retirees in order to participate in the Emeriti Program.
The tax-exempt employer sponsoring an Emeriti Plan under the Emeriti Program determines the eligibility of its employees, as well as the definition of dependents. The participant eligibility definition typically builds upon the non-profit employer’s current health or retirement benefit criteria.
Normally, tax-exempt organizations choose not to include adjuncts, temporary workers, casual employees, and others who work less than 20 hours per week as benefits-eligible for the Emeriti benefit.
The employer defines the scope of eligible dependents, which may include spouse, domestic partner, dependent children, and dependent relatives. The eligible participant then designates those individuals who meet the requirements of "dependent" status by placing a call to the Emeriti Service Center.
Current retirees are those persons who had already retired from service with the employer upon the date the employer's Emeriti Plan is established. The employer determines the eligibility of current retirees for insurance benefits under its Emeriti Plan based upon criteria which the employer typically had previously established, such as age and service guidelines of a retirement plan or a postretirement health plan.
As long as the definition of dependent satisfies plan requirements, the participant may designate any changes in dependents via a phone call to the Emeriti Service Center.
Domestic partners, whether same sex or opposite sex, are eligible to receive benefits according to the defined elections of the employer plan.
Only those domestic partners who qualify as "dependents" under Section 152(a) of the Internal Revenue Code may receive benefits (i.e. both the Emeriti Health Insurance Options and the Emeriti Reimbursement Benefit) through the participant's assets in the Emeriti Health Account held within the VEBA Trusts. Generally, a "dependent" domestic partner is defined as a person of the same or opposite sex (1) who receives over half of his/her support during the year from the employee and (2) who has his/her principal place of abode during the taxable year in the home of the employee.
"Independent" domestic partners who cannot satisfy these requirements are allowed to purchase retiree medical coverage offered through the Emeriti Program, but they must pay premiums via electronic fund transfer from personal bank accounts standing outside the VEBA Trusts. Independent domestic partners cannot use the Emeriti Reimbursement Benefit due to IRS regulations issued under section 152(a) of the Code.
The employer is required to make annual contributions of no less than 1/2% the aggregate payroll for benefits-eligible participants. Employer contributions are paid into a segregated trust, which holds individual accounts for each participating employee. The employer contributions are made on a tax-free basis in the name of the employee. Investment returns in the accounts accumulate on a tax-free basis.
Employees may contribute on a voluntary basis to the Emeriti Health Accounts via payroll deductions or via electronic transfer from a personal bank account. Employee contributions are paid into another separate trust which holds individual accounts for each participating employee. Employee contributions are made on an after-tax basis. Investment returns on account assets accumulate on a tax-free basis.
Depending on plan elections, an employer may also mandate employee contributions in lieu of salary as a condition of employment, or the employer may establish an automatic enrollment feature where employees begin to contribute a designated amount on a regular basis from payroll, but are provided the opportunity to opt out of this feature of the Emeriti Plan if, at any time, they wish to cease contributing their own funds, or wish to change the amounts they are contributing.
Even retirees may contribute into the Emeriti Health Accounts via an electronic transfer of funds from a designated personal bank account.
All employer contributions made on behalf of eligible employees must be made on an equal flat dollar basis, unlike 403(b) retirement plans which employers usually fund on a percentage of salary basis.
The employer determines the age and service requirements that an employee must satisfy in order to receive employer contributions. Employer funding must begin no later than when the employee attains age 40. Many employers start funding on behalf of eligible employees in the range between age 21 and age 40.
Employers also may determine a variable number of years of service over which they will contribute on behalf of an employee. Many employers contribute to their Emeriti Plan on behalf of an employee until he or she has worked for the employer for 20, 25, or 30 years, at which time contributions cease. The termination of employer contributions often coincides with Medicare eligibility at age 65.
According to the terms of an employer's Emeriti Plan, the employer may offer existing retirees a subsidy for insurance premiums. An employer would typically consider offering a subsidy if there is an existing retiree group health plan in place when the institution joins the Emeriti Program. In other instances, an employer may provide access to, but no subsidy for, a range of group medical, prescription drug, and dental plans, from which a retiree and his or her eligible spouse or domestic partner may choose each year at annual enrollment. In that situation, the retiree pays the full cost of insurance premiums from his/her own resources via an electronic transfer. An eligible retiree may also make personal contributions into Emeriti Health Accounts from time to time for future payment of expenses associated with the Emeriti Health Insurance Options and the Emeriti Reimbursement Benefit.
Depending on the rules of the employer's Emeriti Plan, employees may begin making voluntary contributions into their employee health accounts from the date of hire, at age 21 or older. Under most plan designs, an employee may begin making voluntary contributions before the employer begins to make contributions on his or her behalf. Employee contributions can typically be made in any amount, unless otherwise restricted by the plan rules, which is quite different from the legal restrictions placed upon 403(b) plan contribution amounts.
Employees may make contributions in two ways: through regular payroll deductions from the workplace and/or via electronic fund transfers from personal banking accounts. In each scenario, the participant calls the Emeriti Service Center either to establish a regular payroll deduction or to make periodic lump-sum contributions of $100 or more from other personal resources, as frequently as once each month.
Even upon termination of employment or after retirement, former employees may continue to make contributions on the same periodic lump-sum basis from personal bank accounts via electronic fund transfer by calling the Emeriti Service Center.
The participant directs the investment of both accounts from among investment options provided by the employer's Emeriti Plan. Currently, participants may choose from a series of life-cycle mutual funds and one money market fund provided by TIAA-CREF.
If a participant does not choose an investment option, all accumulations in his or her Emeriti Health Accounts will be invested in the default option, which is the TIAA-CREF life-cycle mutual fund with a target retirement date closest to the date upon which the employee turns age 65, which is when he or she first becomes eligible for Medicare.
The value of the balance in an employee's Emeriti Health Accounts depends on the amounts contributed and the investment performance of the investment options in which the employee has invested the account balance. The participant bears the investment risk of his or her investment choices (including the passive decision to utilize the default option). There is no guaranty of investment return or principal. Participants should choose investments wisely based on their time horizon to retirement, risk tolerance, and investment goals.
Participants receive quarterly investment statements from TIAA-CREF that provide information regarding the amounts their employer and they personally contributed to the Health Accounts, investment gains or losses, current Health Account balances and their allocation among the available investment options. Savitz provides quarterly health benefit statements about the participant’s health insurance options and reimbursement benefit claim transactions.
It will generally be more advantageous to accumulate assets and pay for medical expenses from Emeriti Health Account assets residing in VEBA Trusts, rather than other retirement income, because Health Account assets used to pay for qualified medical expenses and health insurance premiums are not taxed when distributed from the accounts for that purpose. Most traditional pension plans and retirement accounts tax distributions at retirement, regardless of how they are utilized. (Roth IRAs are one exception to the general rule.)
Individuals, of course, should consider the tax treatment of contributions as well as tax treatment of distributions in order to fairly compare Emeriti Health Accounts to other medical savings and pension savings opportunities they may have.
Access to Emeriti retiree health benefits does not end when the balance in Emeriti Health Accounts goes to zero. A retired participant who is participating in one of the Emeriti Health Insurance Options may continue to do so. In order to ensure that his or her insurance premiums are paid when due, he or she will be required to establish an electronic transfer of funds from a designated personal bank account to pay for monthly premiums. These arrangements can be made through the Emeriti Service Center (1-866-EMERITI).
Similarly, retired participants who have depleted their Emeriti Health Accounts, may continue to make periodic lump-sum contributions into their Emeriti Health Accounts from other personal bank accounts, and utilize those funds (and any earnings gained thereon) both to pay for Emeriti Health Insurance Option premiums and to receive reimbursement for qualified medical expenses through the Emeriti Reimbursement Benefit.
Employees who make voluntary contributions into their Emeriti Health Accounts always have a nonforfeitable right to their personally contributed account balance.
Employees acquire a nonforfeitable right (i.e., they become "vested") to employer contributions made on their behalf into the Emeriti Health Accounts in accordance with the employer's plan rules, usually defined in terms of age and service. Unlike the employee's own contributions, employer contributions (and associated earnings) will be forfeited to the plan if the age and service criteria are not satisfied when the employee stops working for the employer sponsoring the Emeriti Plan.
First, employer contributions stop when the participant ceases to be employed by the institution.
Secondly, the participant gets to keep the funds in the account if he/she has become vested and may continue to make personal contributions into the Emeriti Health Account, if he/she wishes, after separation from service.
However, if the participant has not satisfied the plan's years of continuous service requirement before termination of employment, then the employer-contributed account balance is forfeited to the employer’s Emeriti Plan for the employer's use on behalf of other eligible participants.
In most Emeriti Plans, participants can begin to use the balance in their Emeriti Health Accounts when they retire at age 55 or older according to the vesting requirement of the plan. As the owner of the account, the participant may request payment of his/her own out-of-pocket medical expense via the Emeriti Reimbursement Benefit, as well as qualifying health care expenses of eligible family members who are dependents as defined by the plan and designated by the participant.
If there is a small account balance of less than $5,000, the vested participant may begin using those assets immediately after termination of service for qualifying medical expenses. For larger balances, the terminated employee must wait until retirement at age 55 or older.
Yes, there are some special situations where assets can be withdrawn early (before retirement) for qualifying medical expenses. Situations include becoming permanently disabled or incurring special hardship medical expenses beyond the limits of insurance coverage.
Disability: A Participant may use the assets in his or her Emeriti Health Accounts prior to eligibility for retirement if he or she becomes disabled during active service and has been determined disabled by the Social Security Administration. The disabled employee would become 100% vested in the Emeriti Health Accounts and would be able to use the Emeriti Reimbursement Benefit. Because he or she has been determined disabled by the Social Security Administration, he or she would also be eligible for Medicare and would be able to elect coverage under the Emeriti Health Insurance Options.
Medical Hardship: A Participant may also be permitted to use his or her vested account balances to obtain reimbursement for qualifying medical expenses in the event he or she had incurred financial hardship resulting from a terminal illness or catastrophic medical expense obligations.
There is a very broad range of health care expenses that can be reimbursed through the Emeriti Reimbursement Benefit according to section 213(d) of the Internal Revenue Code. Typically, these are expenses beyond the coverage of Medicare and retiree supplemental insurance offered through the Emeriti Health Insurance Options. Sample health care expenses include various cost shares (deductibles, copayments, coinsurance) associated with Medicare and post-65 supplemental insurance, COBRA premiums, pre-65 retiree insurance coverage (if there is no employer plan), dental expenses, vision needs, hearing care, certain over-the-counter medications (not covered by a prescription drug plan), home health care services, and long-term care insurance premiums, among other qualifying expenditures. Please see the Emeriti website at www.emeritihealth.org for more detailed information.
No, the assets in the Emeriti Health Accounts can only be used to obtain reimbursement for qualifying health care expenses. Remember that the VEBA Trusts confer considerable tax advantages because the Emeriti Health Accounts are set up to meet health care costs in retirement. This is different from 403(b) retirement plans, where all withdrawals are taxed and where early withdrawals are also assessed a tax penalty.
The residual balance in the participant's Emeriti Health Accounts derived from both employee and employer contributions may be used tax-free by the surviving spouse and other qualifying dependents until such time as all assets in the Emeriti Health Accounts are depleted. Even if the account balance goes to zero, the surviving spouse may continue insurance coverage by paying premiums via electronic fund transfer from a designated personal bank account.
In the event that a residual balance remains in the Emeriti Health Accounts at the participant’s death and there are no surviving eligible dependents, or upon the death of the last surviving eligible dependent, any remaining assets in the accounts are forfeited and returned to the employer's Emeriti Plan according to specific rules of the plan. Please see the section on forfeitures for more details.
The Emeriti Program offers a flexible menu of post-65 group retiree insurance options supplementing or coordinating with Medicare coverage. At each annual enrollment, retirees may choose from a range of medical plans and prescription drug plans according to their health status and financial situation. All plans are guaranteed issue (there is no pre-existing condition exclusion), offer catastrophic protection, and provide annual choice. Emeriti strives to make all plans available nationally, subject to state insurance approvals and other mandates. Some plans provide additional preventive services beyond Medicare-covered services. Some plans provide coverage when traveling outside of the United States.
The Emeriti Program also offers a dental plan as an optional insurance benefit.
Emeriti encourages some level of cost sharing in all insurance plans to keep costs and premium increases as low as possible over time.
Currently, all Emeriti Health Insurance options allow enrollees to see any doctor or other medical provider who accepts Medicare. Some plans under the rubric of Medicare Advantage (Part C) are expected to have network requirements in the future according to new rules being established by the Centers for Medicare and Medicaid Services (CMS). In the Emeriti Program, there is always a choice of plans without network provisions.
The participant and certain eligible family members can have access to the full range of Emeriti Health Insurance Options when the participant has satisfied the retirement eligibility definition of the employer's Emeriti Plan, has retired, has attained age 65 or older, and has enrolled in Medicare Parts A and B. A spouse or domestic partner must elect the same insurance coverage as the retiree.
The employer's Emeriti Plan typically establishes a definition of retirement eligibility that uses some combination of age and service, such as age 55 with 10 years of continuous service. In some instances, employers use the same definition that they use for pension plan benefits. When an employee satisfies retirement eligibility criteria established under the terms of the plan, it means that he/she has guaranteed access to the insurance options available through the Emeriti Program at whatever time he/she retires after satisfying that definition.
No, participants may continue to work past age 65. However, to take advantage of the guaranteed access provision of the Emeriti Health Insurance, participants must enroll in Emeriti coverage upon their retirement, whether at Medicare eligibility or some later retirement date. They must also be enrolled in Medicare Part A and B in order to participate in the Emeriti Health Insurance Options.
Yes, each year at annual enrollment, retirees may choose from any of the medical, prescription drug, and dental plan options available through the Emeriti Program.
No. Please remember that Participants are allowed full access to the Emeriti Health Insurance Options upon their first enrollment opportunity following their retirement. Thereafter, they are not allowed to enroll and disenroll from the Emeriti Health Insurance Benefits at will because the Consortium seeks to avoid adverse selection, thereby keeping costs down for all insurance enrollees. If Participants opt out of Emeriti coverage in any subsequent year after they have retired, they are not allowed re-entry to Emeriti coverage except for certain life-qualifying conditions.
If a retiree enrolls in a spouse's insurance coverage at first retirement, the retiree may later enroll in the Emeriti Health Insurance Options if the spouse subsequently retires, loses employment, dies, or if there is a divorce.
Depending on the employer's Emeriti Plan, the employer may elect to include Emeriti's pre-65 retiree group insurance as part of the Emeriti Plan. In some cases, employers allow pre-65 retirees to stay in the employer's health insurance plan and to pay a portion or the full cost of the health insurance premium. In other instances, if pre-65 retirees are within 18 months of Medicare eligibility, they may exercise their rights to COBRA coverage. Otherwise, pre-65 retirees who have met the retirement eligibility will need to research health insurance options available in the individual market, until they become eligible to enroll in Emeriti Health Insurance Options at age 65.
Except for certain qualifying life events described previously, retirees who choose not to enroll in Emeriti coverage at their first enrollment opportunity following their retirement will waive all future rights to Emeriti’s guaranteed issue coverage. This decision should be made very carefully because there will be no re-entry into the Emeriti Health Insurance Options.
Certain one-time exceptions for re-entry are granted to participants who, at their first enrollment opportunity following their retirement, had enrolled in Kaiser Permanente plans in selected geographical areas on the West Coast and subsequently found themselves outside of a Kaiser service area.
Participants who elect another health plan outside of the Emeriti Program can receive reimbursement for their insurance coverage through the Emeriti Reimbursement Benefit if they submit proof of coverage and payment for as long as they maintain a positive fund balance in their Emeriti Health Accounts.
Eligible family members include a spouse or domestic partner (pre-65 or post-65), any dependent children (before age 26 majority status), and permanently disabled children (whose disability was documented prior to age of majority).
Other family members cannot enroll until the retired Participant enrolls in Emeriti health insurance.
When the eligible dependent also has retired at age 65 or older and has enrolled in Medicare Part A and Part B, the participant and the dependent must enroll in the same post-65 retiree health options.
Yes, a spouse or domestic partner can continue enrollment in the Emeriti coverage after the death of the participant as long as there is a fund balance in the Emeriti Health Accounts or as long as he/she provides an alternate source of funding through electronic fund transfer.
If any assets remain at the participant's death, the residual balance can be used by the spouse or other eligible dependents until they all have died or lost eligibility (in the case of dependent children when they attain majority status).
There is no provision for a death benefit within the IRS regulations governing the Emeriti VEBA Trusts. However, a surviving spouse and eligible dependents have the right to use any remaining fund balance on a tax-free basis over their lifetimes for the Emeriti Reimbursement Benefit and for Emeriti Health Insurance Options, according to their dependent status.
In most instances, it is very unlikely that there will be any remaining assets. However, in the case of a residual fund balance, the available account assets are forfeited to the employer’s Emeriti Plan for the benefit of current and future benefits-eligible participants in that plan.
It is important to make a distinction between funds segregated in the employee-contributed account and in the employer-contributed account. If assets remain in the employee VEBA account, the balance is distributed equally among all fellow participants in the employer's Emeriti Plan who have employee-contributed account balances. If assets remain in the employer VEBA account, the employer has multiple options for the use of forfeitures. The employer may use the forfeitures to offset future contributions into its Emeriti Plan, distribute the balance equally among all plan participants, or purchase a declining term life insurance product for all retired participants of the plan.
Emeriti uses various means of communication to stay in touch with participants during active service and after retirement.
Emeriti charges each participant account $5 per month for the Consortium's educational support and administrative services, whether a participant is in active employment status or has retired. The fee is assessed on a participant account basis, regardless of how many family members may be benefiting from the account. This fee is deducted monthly.
TIAA-CREF charges $.67 per month for its record-keeping services when the participant is in active employment status, vested terminated status and retiree status. Savitz charges $1.00 per month when the participant is in active employment status, and $6.00 per month when the participant is in vested terminated or retired status for insurance enrollments, premium processing, and fund transfers.
The charge for the insurers' administrative services is already included in the premiums.
There is no fee for claims submitted for reimbursement.
Investment management fees are already included in the reported total return for each fund. Participants should request and read the TIAA-CREF prospectuses carefully to understand the specific fee structure for each investment option.
Each employer with an Emeriti Plan deals with fees in different ways. Employers may pay all of the fees, a portion of the fees, or may make those charges the responsibility of participants.
Generally, fees are deducted automatically on a monthly or quarterly basis by the record keeper from assets held within the Emeriti Health Accounts. In some instances, employers will pay some portion of the fees directly to Emeriti or to service providers outside of the Emeriti Health Accounts.