2013 Benefits
THE EMERITI PROGRAM for those planning for retirement
Medicare and Emeriti’s Health Insurance and Reimbursement Benefit
This presentation is copyrighted © exclusively by Emeriti
1
Your Institution’s Commitment
Your Institution is:
Giving you a tax-free way to pay your health care expenses in retirement
Providing access to group health insurance when you retire
Offering tax-free reimbursement for other health care expenses
Keeping you informed about retiree health care issues along the way
2
Comprehensive Retirement Security
403 (b)
Retirement Plan
501 (c) (9) – VEBA
Retiree Health Plan
Accessible for general
retirement expenses
Dedicated to health-related
retirement expenses
Retiree income distribution is
taxable
Retiree health benefit
distributions are tax-free
Beneficiaries
Dependents
Assets passed to the estate
Assets passed on for mutual
benefit of the plan
3
Emeriti’s Core Benefit Components
Emeriti Health
Accounts
• Tax-advantaged savings and
investment vehicle, via VEBA
Trusts, for payment of future
medical expenses in retirement
Emeriti Health
Insurance
• Portable group retiree health
insurance options building on the
foundation of Medicare
Emeriti
Reimbursement
Benefits
• Tax-free reimbursement of other
qualified medical expenses not
covered by Medicare or Emeriti
insurance options
4
Investment Options 2013 – Emeriti Health Account
TIAA-CREF
Lifecycle Funds
(Retirement Class)
• Lifecycle funds
• Asset diversification among asset classes
• Automatic rebalancing
CORE
FUNDS
TIAA-CREF
Money Market Fund
(Retirement Class)
CORE
PLUS
FUNDS
Additional Mutual
Funds – based on
institution’s election
• A money market mutual fund
• Seeks to assure the value of your investment at $1
per share
• Some TIAA-CREF proprietary funds
• Some non-proprietary funds from other mutual
fund families
5
Emeriti’s Service Providers
Emeriti
TIAACREF
Accumulation
Recordkeeping
Trust Services
Investment
Management
Proprietary
Mutual Funds
Non
Proprietary
Mutual Funds
Savitz
Aetna
HealthPartners
Disbursement
Recordkeeping
Retiree Health
Plans
Retiree Health
Plans
Qualifying
Medical
Expenses
Insurance
Premiums
Debit Card
Manual Claims
6
Medicare is Not Enough
Other
14%*
Out-ofPocket
13%
Medicare
59%
Private
Insurance
14%
Source: EBRI estimates from the 2009 Medical Expenditure Panel Survey.
*VA, Tricare, other private, Medicaid, other.
11 7
What Are You Saving For?
Medicare
•
•
•
•
•
Part B premium
Part A deductible
Part B deductible
Part D deductible
Part D Coverage Gap
cost share
• Part D True Out-ofPocket) TrOOP
Supplemental
Insurance
• Premiums
• Plan deductibles
• Plan co-pays and
co-insurance
Out-of-Pocket
Expenses
•
•
•
•
•
•
Vision
Dental
Hearing
Medical equipment
Long-term care
Nursing home
8
Understanding Medicare Cost Sharing
What’s New and What Stays the Same in 2013
•
Part A annual deductible will increase from $1156 to $1184
•
Part B annual deductible will increase from $140 to $147
•
Monthly Part B premium will increase from $99.90* to $104.90
•
Part D annual deductible will increase from $320 to $325
•
Part D Coverage Gap threshold will increase from $2,930 to $2,970
•
Part D True Out-of-Pocket (TrOOP) will increase from $4,700 to $4,750
*Higher-income beneficiaries will pay an additional amount for the Part B premium, based on their prior year AGI on
the federal tax return, and also for the Part D premium.
Beneficiaries who did not contribute to FICA for at least 40 quarters will also pay a Part A premium of $441 each
month; higher-income participants may pay more.
9
How Medicare Works
Part A (Hospital) and
Part B (Medical)
Original Medicare
• Medicare provides these coverages
• You have your choice of doctors & providers
Part C
Medicare Advantage, PPO Plan
• Private insurers approved by Medicare provide
Parts A & B coverage
• You may get extra benefits
Part D
Prescription Drug
• Private insurers approved by Medicare provide coverage
• Different plans cover different drugs at different levels
• You can choose from a range of plan designs
10
Four Components of Part D Benefit
Coverage Gap
Deductible
You pay first
$325 as
deductible
Initial Coverage
Period
You pay 25% of
drug costs
You pay 97.5% of
brand drugs
You pay 79% of
generic drugs
Catastrophic
Coverage
You pay 5%
You reach the Coverage Gap at $2,970 in total Part D covered drug expenditures (includes plan
deductible, your costs and plan costs in the Initial Coverage Period).
You reach Catastrophic Coverage at $4,750 in true out-of-pocket costs.
11
Advantages of Emeriti Post-65 Insurance
Emeriti’s group plans build on the foundation of Medicare.
• Guaranteed issue group health insurance coverage
• Portable, nationwide access
• A flexible menu of insurance options
• Annual choice among plans
• Catastrophic protection
• Part D prescription drug coverage
• Foreign urgent or emergency care*
• Preventive care**
*Available in some plans.
** Varies by plan.
12
Emeriti Insurance Choices for 2013
Emeriti Group Medical Plans
One Medicare coordination plan
Two Medicare supplemental plans (availability based on state approval)
One Medicare Advantage PPO (Extended Service Area (ESA) available for geographical
areas outside Aetna’s network)
Emeriti Rx Plans*
Rx High Plan – continuing coverage in coverage gap
Rx Mid Plan – generic coverage only in coverage gap
Rx Low Plan – no coverage in coverage gap
Emeriti Dental Plan
One dental plan
PLEASE NOTE: Emeriti will offer Aetna Group Medicare Supplement Insurance (GMS) Plans A and L to retirees living in Florida.
13
Emeriti Group Medical Plan Options in 2013
Underwritten by Aetna
Aetna Traditional Choice
$200 Deductible
20% coinsurance
$1,250 out-of-pocket limit
Aetna Supplemental
Retiree Medical Plan L*
Aetna Supplemental
Retiree Medical Plan K*
$0 Deductible
$0 Deductible in-network
$0 Deductible out-of-network
25% coinsurance
50% coinsurance
15% coinsurance (in-network)
25% coinsurance (out-of-network)
$2,400 out-of-pocket limit
$4,800 out-of-pocket limit
$0 Deductible
100% preventive care
covered by Medicare
100% preventive care
covered by Medicare
After plan deductible
is satisfied,
plan payment in full on
Medicare eligible costs.
Payment based on the
balance after
Medicare’s payment.
Payment based on the
balance after
Medicare’s payment.
Age banded
Age banded
Age banded
Aetna Medicare Advantage PPO/ESA-PPO
100% preventive care
covered by Medicare
$2,750 out-of-pocket limit (in-network)
$5,500 out-of-pocket (out-of-network)
100% preventive care
covered by the Plan
Payment based on total
Aetna allowable cost.
Community rated
NOTES: The ESA-PPO Plan has the same benefits as the In-Network PPO Plan.
Aetna’s GMS Plans A and L will be offered in Florida in place of SRM Plans K and L.
*For 2013, the SRM Plans are not available in VT, MN, and America Samoa.
14
Rx Coverage Options in 2013
Underwritten by Aetna
Rx Low Plan
Rx Mid Plan
Rx High Plan
Standard Formulary
Open Formulary
Open Formulary
$325 deductible
$100 deductible
$100 deductible
Initial Cov Limit Retail:
Initial Cov Limit Retail
Initial Cov Limit and Coverage Gap Retail
15% - 30%
15% - 30% - 50%
15% - 30% - 40%
Coverage Gap: no coverage*
Coverage Gap: generic coverage only*
Coverage Gap: full coverage
Catastrophic Cov: 95% coverage
Catastrophic Cov: 95% coverage
Catastrophic Cov: 100% coverage
Step therapy required for some drugs
Step therapy required for some drugs
No Step therapy required
Geographically rated
Geographically rated
Geographically rated
NOTE: 5% DISCOUNT ON MAIL ORDER through Aetna’s Rx Home Delivery .
*Participant has 79% cost sharing limit on generic drugs in Coverage Gap (Rx Low Plan), and 2.5% plan cost
sharing on brand drugs in the Coverage Gap (Rx Mid Plan and Rx Low Plan).
The Medicare Coverage Gap Discount Program provides a 50% manufacturer discount on brand drugs in the Coverage Gap for all Rx plans for
participants not already receiving “Extra Help.”
15
Dental Coverage in 2013
Underwritten by Aetna
Dental Design
Preventive Service Coverage
100%
Annual Deductible (basic and major services)
$100
Basic Services Coverage
(e.g. fillings, standard crowns, extractions)
50%
Major Services Coverage
(e.g. root canal therapy, surgical removals, dentures)
50%
Annual Benefit Maximum
$1,500
Rate Structure
Community rated
NOTES:
1.Twelve month waiting period applies, but may be waived with evidence of continuing coverage.
2.One-time only opt-in opportunity.
3.Dental is only available when you enroll in a combination Medical/Rx coverage, or elect the stand-alone Rx Low Plan
16
Create Your Own Plan
STEP 1
select a medical plan
STEP 2
select an Rx plan
STEP 3
Consider the optional dental plan
17
Preserving Your Options at Initial Medicare Entry
Select Rx Low Plan
Choose Rx Low Plan as stand-alone option
Consider Dental
Add dental to the Rx Low Plan if you wish
NOTE: Be sure to determine Part D credible coverage if you stay in an
active health plan beyond first Medicare eligibility
18
How Do You Access Medicare and Emeriti Health Insurance
After age 65
When you retire
After enrollment
in Medicare Parts A & B
Harvey Mudd College Retirement Eligibility for Insurance:
 Age 55
 5 Years of Service
NOTE: Consult your Summary Plan Description for details.
19
Who Can Use Emeriti Health Insurance
Available for Participant & Dependents
Participant’s dependents include:
Spouse (pre- or post-65)
Domestic partner (pre- or post-65) depending on your plan*
Dependent children (before majority, to age 26)
Permanently disabled children**
Post-65 dependents must enroll in same coverage as participant
NOTE: The employer’s plan establishes specific rules for vesting in the Emeriti account balance and
retirement eligibility for the Emeriti insurance.
*Domestic partners’ coverage is available only if elected by the institution. Independent domestic
partners pay for insurance outside of the Health Account.
**Determination of permanent disability also confers access to post-65 insurance for these
individuals. Disability must occur before majority.
20
Estimating Future Supplemental Plan Rates
Emeriti Rates in 2013 for Zip Code – 91711
MEDICAL PLAN CHOICES
2013 MONTHLY RATES @ entry age 65
Group Medigap Plan K
$109.31
Group Medigap Plan L
$135.84
Medicare Advantage PPO
$210.10 – community rated
Traditional Choice
$150.05
RX PLAN CHOICES
2013 MONTHLY RATES @ any age
Low Rx – no gap coverage
$21.81
Mid Rx – generics - gap coverage
$75.72
High Rx – generics and brands –
through gap coverage
$139.34
DENTAL PLAN OPTION
2013 MONTHLY RATES @ any age
PPO Plan
$58.33
NOTE: For continuing participants in closed Mid-high Rx Plan, the rate is $116.71
21
Emeriti’s Other Program Components
Emeriti Reimbursement Benefits
A tax-free method for you to pay for other qualified out-of-pocket medical expenses not
covered by Medicare or Emeriti insurance.
Emeriti Health Accounts
A tax-advantaged way to save and invest for future medical expenses.
Note: ACH savings option will be available in 2013.
22
Reimbursement Benefits at Work
For expenses incurred after termination
Manually submit claims to Savitz:
• Mail
• Fax
• Upload through Participant Benefits Dashboard
(MyEmeritiBenefits.org)
Debit card option in development for 2013
Reimbursement Benefits will be paid from participant’s balance in the Money Market Fund.
Participants may transfer lump-sum amounts or set-up monthly systematic transfers in
amounts of $100 or more.
23
How You Can Use Your Reimbursement Benefit
Partial List of Uses
Medicare premiums and cost shares
Supplemental insurance deductibles, co-insurance, co-pays
Vision, dental, hearing care
Over-the-counter and non-formulary drugs (with Rx prescription from doctor)
Medical equipment
Long-term care insurance
Medical expenses associated with nursing or in-home health care services
Other post-65 and pre-65 insurance premiums (if Emeriti coverage is not elected)
NOTE: A wide range of health care expenses are eligible for tax-free reimbursement as long as they satisfy
the requirements of Section 213 (d) of the IRS Code.
Harvey Mudd College Vesting for Reimbursements:
 5 years of service
Emeriti Reimbursement Form available on MyEmeritiBenefits.org
24
Who Can Use Your Reimbursement Benefits
Available for You & Your Dependents
Participant’s dependents include:
Spouse (pre- or post-65)
Domestic partner (pre- or post-65) depending on your plan
Dependent children (before majority, to age 26)
Permanently disabled children
Dependent relatives depending on your plan
Consult your summary plan description for details
25
ESSENTIAL SERVICES
In print | In person | On phone
Call toll-free:
1-866-EMERITI
(1-866-363-7484)
• Annual workshops on campus
• Investment statement
• National teleconferences
• Benefits statement
Monday – Friday
9:00AM to 5:30PM (ET)
• When you are saving
• Initial age-in kit at Medicare eligibility
• When you are nearing retirement
• Annual insurance enrollment kit, thereafter
• When you are using retiree health benefits
26
How to Use the Emeriti Service Center
1-866-Emeriti
Thank you for calling Emeriti
Please listen carefully, as our menu has changed.
YOU WILL HAVE 3 CHOICES
For information about
Insurance Enrollment,
press 1
For information about the
Reimbursement Benefit,
press 2
For information about the
Health Accounts,
press 3
27
TIAA-CREF Quarterly Statement - Investments
Savitz Quarterly Statement – Benefits
28
DIGITAL SERVICES
Online access via EmeritiHealth.org
29
DIGITAL SERVICES
Online access via EmeritiHealth.org
• Comprehensive Program website
• At-a-glance benefits website
• Visit EmeritiHealth.org
• Register at MyEmeritiBenefits.org
• Online resource for insurance benefits
and health information
• Check your insurance claims
• Order prescriptions online
• Check your Emeriti Health
Account balance
• Log-in at tiaa-cref.org
• Online resource for insurance benefits
and health information
• Access via EmeritiHealth.org
• Detailed investment information
• Prospectuses, fund fact sheets,
performance reports
• Website in development
• Access via EmeritiHealth.org
30
•
Health Account balances
•
Health Insurance enrollments
•
Reimbursement Benefit transactions
Register today at MyEmeritiBenefits.org
31
Log-in at TIAA-CREF.org
• Investment choices
• Account balances
• Contribution history
• Recent transactions
32
Status of 2012 Services Commitments
• Improved Emeriti Service Center:
9am – 5:30pm ET
1-866-EMERITI
• Dedicated Emeriti representatives
• Improved warm transfers
• Enhanced reimbursement benefit options:
• Manual claims can be submitted via direct mail, fax, or uploaded to participant benefits dashboard,
starting in January
• New debit card option in development for 2013
• Online participant dashboard:
• At-a-glance summary of Health Account activity, insurance plan information,
and reimbursement benefit transactions.
• Quarterly statements:
• Investment statement from TIAA-CREF
• Health insurance and reimbursement benefit statement from Savitz
• Enhanced menu of investment funds and institutional Microsites:
• Proprietary and non-proprietary fund choices
• Microsites in development for 2013
• Improved suite of life-stage communications for participants:
• Retired participants
• Participants nearing retirement
• Younger active participants – in development for 2013
• Improved ACH savings opportunity from personal bank accounts:
• Recurring and periodic lump sum savings option – in development for 2013
33
Emeriti Program Fees
Your employer may cover all or some portion of the service fees. Check with
your institution’s benefit administrator if you are uncertain.
Monthly Participant Fees
Fees
Actives
Retirees*
Emeriti
$5.00
$5.00
TIAA-CREF
$ .67
$ .67
Savitz
$1.00
$6.00
Investment management fees are variable by selected mutual funds (see prospectuses)
*Also applies to vested terminated employees
34
Emeriti Retirement Health Solutions provided this information and is responsible for its content.
Emeriti, TIAA-CREF, Savitz, Aetna Life Insurance Company, and HealthPartners are independent corporations
and are not legally affiliated.
The retirement healthcare program is offered by the employer. Teachers Insurance and Annuity Association (TIAA) will provide services
to the plan and make available investment options. TIAA-CREF Trust Company, FSB provides investment management and trust services.
Emeriti Retirement Health Solutions is not an insurance company, insurance broker or insurance provider.
Summary Plan Description (SPD)
This presentation is intended to provide you with a brief summary of some of the details of your Employer’s Emeriti Plan and the Emeriti
Program. For a full summary of the terms of your Employer’s Emeriti Plan you must consult the SPD, which will be provided to you upon
enrollment or upon request.
35
Investment Adviser Status
Emeriti Retirement Health Solutions is a registered investment adviser for purposes of selecting the range of investment options for the Emeriti Program, selecting the
investment manager for employer and voluntary employee contributions, and providing these and other impersonal educational materials to plan participants. Emeriti
does not provide advice to participants about their individual investment selections.
The participation interests in the voluntary employee contribution VEBA trusts associated with the Emeriti plans (the “Interests”) may be treated as securities under
various state securities laws. The offering of these Interests is subject to compliance with any applicable state law. For residents of Georgia, the Interests are being
offered in reliance on paragraph 13 of Code Section 10-5-9 of the Georgia Securities Act of 1973, as amended (the “Georgia Act”). The Interests may not be sold or
transferred except in a transaction which is exempt under the Georgia Act or pursuant to an effective registration under the Georgia Act.
36
Addendum
37
CMS 21% Mandate in the Coverage Gap
For generic drugs in the Gap (one month supply obtained at in-network retail pharmacy):
Sample Generic - $30
Rx Low Plan
Rx Mid Plan
Rx-High Plan
Your Cost Share
79%
15%
15%
You Pay
$23.70
$4.50
$4.50
All costs above are illustrative. Table reflects cost sharing between plan Initial Coverage Limit and TrOOP
threshold for members not eligible for low income cost sharing subsidies .
38
CMS Negotiated Brand Discount in Coverage Gap
CMS 2.5% Mandate in Coverage Gap
For eligible brand drugs in the Gap (one month supply obtained at in-network retail pharmacy):
Sample Brand - $100
Rx Low Plan
Rx Mid Plan
Rx High Plan
Pharma Cost Share
50% Manufacturer
Discount on total cost
of drug
50% Manufacturer
Discount on total
cost of drug
50% Manufacturer
Discount on total
cost of drug
Plan Cost Share
2.5% of $100 total
drug cost
2.5% of $100 total
drug cost
Plan pays
balance, after your
30% cost share
Your Cost Share
47.5%
47.5%
30% of total drug
cost
You Pay
$47.50
$47.50
$30
(Preferred Brand)
All costs above are illustrative. Table reflects cost sharing between plan Initial Coverage Limit and TrOOP
threshold for members not eligible for low-income cost sharing subsidies. There is also a dispensing fee.
39
Retiree Cost Share for Typical Doctor’s Visit Bill of $100
Trad. Choice
SRMP L
SRMP K
MA-PPO/ESA
Charge
$100
$100
$100
$100
Medicare Pays
$80
$80
$80
$0
Aetna Pays
$20
$15
$10
$85
You Pay
$0
$5
$10
$15
NOTE: Illustration assumes any annual plan deductibles have already been satisfied for the plan year.
40
Standard Medicare Part D in 2013
Deductible
YOU PAY FIRST
$325 AS
DEDUCTIBLE
Initial Coverage
Period
PLAN PAYS 75%
OF DRUG COSTS
($1983.75)
Coverage Gap
YOU PAY 97.5%
OF BRAND
DRUGS AND 79%
OF GENERIC
DRUGS
($3763.75)
YOU PAY 25% OF
DRUG COSTS
($661.25)
Catastrophic
Coverage
PLAN PAYS 95%
YOU PAY 5%
* Greater of $2.65 or 5% for
covered generic (including brand
drugs treated as generic) drugs.
Greater of $6.60 or 5% for all
other drugs.
You reach the Coverage Gap at $2,970 in total Part D covered drug expenditures (includes plan
deductible, your costs and plan costs in the Initial Coverage Period).
You reach Catastrophic Coverage at $4,750 in true out-of-pocket costs. This threshold includes plan
deductible, your 25% cost share during Initial Coverage Period, and your
97.5% cost share for brand drugs and 79% cost share for generic drugs in the Coverage Gap.
41