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3	What is the Emeriti Health Solutions Program? Comprehensive retirement benefits program available to higher education and higher education related tax-exempt organizations Institutional membership is required Provides a full retirement benefit solution for SPU
4	"Emeriti Program Origin" Emeriti Program Origin
5	Emeriti Program Origin - 1 Mellon College Retirement Project: Multiple year study of faculty retirement patterns to find out why faculty were delaying their retirement
6	Emeriti Program Origin – 2 Faculty Concerns: “[Health insurance] is the number one concern I have about retirement —without a doubt the tremendous cost of medical care…. The one scenario that could wipe me out is a long-term illness.”
7	Emeriti Program Origin – 3 Faculty Concerns: “I’d say health insurance is something that everyone worries about -- not so much the cost of the insurance itself, but you’ve got to have good enough insurance so that major medical expenses don’t bankrupt you.”
8	Emeriti Program Origin – 3 Conclusion: Concerns about access to healthcare and healthcare costs were cited as the primary reasons faculty were delaying retirement
9	"Healthcare Expenses in Retirement" Healthcare Expenses in Retirement
10	Healthcare Expenses in Retirement - 1 50 - 60% Medicare’s contribution to retiree health care costs 40 - 50% Expected out-of-pocket commitments for covering non-insured medical expenses, private insurance and other healthcare expenses, paid from your disposable income
11	Healthcare Expenses in Retirement - 2 How much will you spend in retirement?
12	Healthcare Expenses in Retirement - 3 Today - A couple retiring at age 65 will need $175,000 to cover their healthcare expenses. In 25 Years - A couple retiring at age 65 will need $560,000 for healthcare expenses. Above estimates are based on lifetime expectancy of age 92 for men and age 94 for women 6% medical inflation – Premiums for Medicare Part B have been increasing 12% per year since 2001 Does not include the cost of nursing home care and Medicare provides only very limited coverage for this type of coverage Source: Fidelity healthcare cost calculator https://powertools.fidelity.com/healthcost/intro.do
13	"Achieving Healthcare Security in Retirement" Achieving Healthcare Security in Retirement
14	Achieving Healthcare Security in Retirement Individuals need: assets for meeting healthcare expenses access to good insurance for protection of health and retirement assets The Emeriti Health Solutions Program was designed to effectively address these needs
15	"Key Features of the Emeriti..." Key Features of the Emeriti Health Solutions Program
16	Key Features of the Emeriti Health Solutions Program - 1 Using a defined contribution strategy, offers employees two ways to pre-fund retiree healthcare expenses and health insurance on a tax-advantaged basis:
17	Key Features of the Emeriti Health Solutions Program - 2 National Health Insurance Program: Fully insured retiree medical insurance program that complements Medicare Three comprehensive Medicare Supplement Plans Two Rx plans, Standard Medicare Part D or enhanced plan Begins at age 65 Provides coverage for spouse and dependent children No health underwriting requirement Insurance accepted nationally by any Medicare provider Short-term international coverage Available to employees who retire from SPU age 60 plus 7 years of service, or age 65 with 5 years of service
18	Key Features of the Emeriti Health Solutions Program - 3 Use of tax advantaged savings accounts: Pay for healthcare insurance premiums for employee, spouse, dependents, and dependent relatives Pay for qualified healthcare expenses not covered by Medicare or Medicare Supplement Over-the-counter medications Nursing or in-home care Long term care insurance
19	"Employer Contribution Savings Account Program" Employer Contribution Savings Account Program
20	Employer Contribution Savings Account Program - 1 Effective July 1, 2006 with first contribution paid on August 1 Regular faculty and staff .5 FTE or above One year waiting period Contributions begin at age 35 and continue for 25 years, or until employment ceases or death $64 per month per eligible participant ($768 per year) – flat contribution is required Cliff vesting -100% after 7 years
21	Employer Contribution Savings Account Program - 2 Right to use employer contributions: Retirement: Age 60 plus 7 years of service, or Age 65 plus 5 years of service, or for all vested employees beginning at age 55 If employer (vested) and employee account balance is less than $5,000, may be accessed upon termination of employment Also may be used earlier if illness or injury is expected to result in death within five years Contributions may be used for insurance or qualified healthcare expenses for spouse, dependents and dependent relatives
22	Employer Contribution Savings Account Program - 3 Non vested participant balances are subject to forfeiture upon participant’s death or termination Unused contributions may be forfeited upon the last to die of the participant, spouse, dependent children, and dependent relatives Forfeitures used to offset future employer contributions Contributions may be invested in Fidelity Freedom Funds – age-related blend of equity, fixed income, and short term investments
23	"Employee Contribution Savings Account Program" Employee Contribution Savings Account Program
24	Employee Contribution Savings Account Program - 1 Effective January 1, 2007 with first payroll deduction beginning on February 1 Regular faculty and staff .5 FTE or above No waiting period Always 100% vested from first dollar saved Flat dollar contribution through payroll deduction Eligible employees may begin or cancel payroll contributions anytime during active employment No limit on contributions – lump sum contributions allowed Contributions may continue following retirement or termination of employment
25	Employee Contribution Savings Account Program - 2 Right to use employee contributions: If employer and employee account balance is less than $5,000, may be accessed upon termination of employment Or for all other employees beginning at age 55 Also may be used earlier if illness or injury is expected to result in death within five years Contributions may be used for insurance or qualified healthcare expenses for spouse, dependents and dependent relatives
26	Employee Contribution Savings Account Program - 3 Unused contributions may be forfeited upon the last to die of the participant, spouse, dependent children, and dependent relatives Forfeited contributions will be distributed on an equal basis to SPU employee contribution accounts with positive balances Contributions may be invested in Fidelity Freedom Funds – age-related blend of equity, fixed income, and short term investments
27	"Program Costs" Program Costs
28	Program Costs SPU Fees Emeriti Participant Fees – SPU pays $4 per participant per month Participant Fees – charged to participant accounts Fidelity Active Participant Account Fee: $5 per quarter or $20 per year Fidelity Retired Participant Account Fee: $6.25 per month or $75 per year (reduced by 50% with $10,000 average participant account and 100% when average account is $20,000) Healthcare Reimbursement Fee: $6 per bundled set of healthcare reimbursements Fidelity standard retail management fees for assets held in the various Fidelity Freedom Funds, Fidelity Income Fund, and Fidelity Retirement Money Market Portfolio
29	"Emeriti Health Solutions Program Administration" Emeriti Health Solutions Program Administration
30	Emeriti Health Solutions Program Administration - 1 Emeriti Consortium Governance Structure
31	Emeriti Health Solutions Program Administration - 2 Trust administration Investment options Record-keeping Annuity products Disbursements for premiums and other reimbursable health expenses
32	Emeriti Health Solutions Program Administration - 3 Emeriti Member Services Printed Materials Annual On-Site Workshops National Call Center Website for Participants and Plan Administrators
33	Questions? Participant website: www.emeritihealth.org For questions and assistance regarding any aspect of your involvement in the Emeriti Program, including your Emeriti Health Accounts and your Emeriti Health Insurance Options, you may speak with a knowledgeable Emeriti Specialist toll-free by calling 1-866-EMERITI (1-866-363-7484), Monday through Friday, 8:00 a.m. to midnight ET (5:00 a.m. to 9:00 p.m. PT) Access your Health Account information virtually 24 hours a day, seven days a week, using secure technology, via Fidelity NetBenefits®.https://login.fidelity.com/ftgw/Fidelity/NBPart/Login/Init?AuthRedUrl=https://workplaceservices300.fidelity.com/NBHome.html You may also access your account information by phone, either through the automated voice response system or by speaking directly with an Emeriti Specialist, at 1-866-EMERITI (1-866-363-7484) Questions about eligibility, contact Randall Hashimoto: randallh@spu.edu or ext 2678, or Carrie McCrimmon: mccric@spu.edu or ext 2676