2013 Benefits
THE EMERITI PROGRAM during your working years
Saving for Health Care Expenses in Retirement
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
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
5
Tax Advantages of Emeriti Health Accounts
Contributions and earnings disbursed tax free during retirement
CONTRIBUTIONS DURING
WORKING YEARS
INVESTMENTS
You Make After-tax Voluntary Contributions
Your Institution Makes Tax-free Employer
Contributions*
Your Assets Accumulate Tax-Free
DISBURSEMENTS DURING
RETIREMENT
You Receive Tax-Free
Emeriti Reimbursement Benefits
You Pay for Emeriti Health
Insurance Premiums Tax-Free
*Begins at a pre-designated age. See your Summary Plan Description or talk to your benefits administrator.
Your institution may make additional pre-tax contributions in lieu of salary or other benefits.
6 8
Investment Options in 2013
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
7
Why You Need to Save
8
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 9
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
• Co-pays and
co-insurance
Out-of-Pocket
Expenses
•
•
•
•
•
Vision
Hearing
Medical equipment
Long-term care
Nursing home
10
Save Early and Consistently
The power of compounding
Potential account earnings
Contributions
Just by saving $100 monthly
$300,000
Total:
$264,012
$216,012
$250,000
$200,000
Total:
$122,709
$150,000
$86,709
SAVINGS
$100,000
$50,000
Total:
$17,409
Total:
$52,397
$28,397
$5,409
$0
YEARS OF SAVING
$12,000
$24,000
$36,000
$48,000
10
20
30
40
These examples are intended for illustrative purposes and are not a prediction of investment results. Your own Plan account may earn more or less than this example. Actual account balances will be
determined by the contributions made and any investment gains or losses. Investing in this manner does not ensure a profit or guarantee against loss in declining markets. These examples do not take fees
into account and actual balances will generally be reduced by fees. Contributions and earnings accrue tax-free and are paid out tax-free for reimbursement of qualified health expenses. These examples are
based on $100 contributions made at the beginning of each month and a 7% annual rate of return compounded monthly. Chart balances shown are end-of-year balances.
11
Keep This In Mind
Tax diversity in retirement is key
WHY?
Medicare cost shares are increasingly indexed to income:
• Medicare Part B premiums
• Medicare Part D premiums
12
Tax Diversity in Retirement in Action
$1,000
medical
bill!
Pay with Emeriti
Health Account
Tax-free withdrawal of
Pay with 403(b)
Retirement Plan
Taxable withdrawal of
approximately
$1,250
80 cents on the dollar
in 20% federal income tax bracket
$1,000
100 cents on the dollar
13
Your Next Steps
Contact your benefits administrator to begin payroll
deferred voluntary contributions
Keep an eye out for Emeriti’s life stage
communications
Visit EmeritiHealth.org
Register on the Emeriti Benefits Dashboard at
MyEmeritiBenefits.org
14
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
15
DIGITAL SERVICES
Online: access via EmeritiHealth.org
16
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
17
Log-in at TIAA-CREF.org
• Investment choices
• Account balances
• Contribution history
• Recent transactions
18
TIAA-CREF Quarterly Statement - Investments
Savitz Quarterly Statement – Benefits
19
•
Health Account balances
•
Health Insurance enrollments
•
Reimbursement Benefit transactions
Register today at MyEmeritiBenefits.org
20
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
21
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
22
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
23
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.
24
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.
25
Addendum
26
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.
27