emeritihealth

1. THE EMERITI PROGRAM for those nearing retirement The Single-Source Solution to Meeting Your Health Care Needs in Retirement www.emeritihealth.org

2. How the Emeriti Program Works • Why You Need to Save • What If You Want to Retire Before Medicare Eligibility • What If You Plan to Retire After Medicare Eligibility • How Can You Plan Now for That Future Decision TODAY’S AGENDA 1-866-EMERITI

3. Your Institution’s Commitment Choosing the Emeriti Program’s innovative employee benefit for you and your eligible dependents during retirement • Helping to ensure your heath care security in retirement • Allowing you to contribute tax-advantage savings for health expenses • Offering you a tax-free mechanism to pay for out-of-pocket health care expenses • Providing access to a range of group retiree health insurance options • Keeping you informed about retiree health care issues and changes in Medicare 3

4. About Emeriti Emeriti is a nonprofit consortium serving the higher education community and education-related nonprofit organizations nationwide by providing sustainable, affordable retiree health care solutions • designs the program features and benefits • coordinates delivery of its products and services with Fidelity Investments and Aetna Life Insurance Company • creates all communication and educational materials 4

5. The Emeriti Relationship Speak to a Fidelity or Aetna customer service representative at Emeriti’s Toll-free Service Center: 1-866-EMERITI 4

6. Emeriti’s Core Program Components

7. Health Accounts During Your Working Years Savings during working years Benefits after retirement Tax-free Employer Contributions* Emeriti Reimbursement Benefits Your After-tax Voluntary Contributions Emeriti Health Insurance Premiums Your Emeriti Health Account Contributions and earnings disbursed tax free during retirement *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. 7 7 7

8. Why You Need to Save

9. Medicare is Not EnoughHow health expenses in retirement are covered *VA/Tricare 4%, Medicaid 4%, Other 2% Source: The Employee Benefit Research Institute (EBRI) 2006 estimates from the 2003 Medical expenditure survey. 9 9 11

10. Estimated Health Care Savings Required for Couple Retiring Today Source: Retiree Health Care Costs: Addressing the Growing Gap, Fidelity Investments, March 2009 Amounts shown are annual savings required for a couple enrolled only in Medicare. The savings illustrations do not include either employer sponsored group insurance or long-term care insurance coverage. 10 10 12 8

11. Save Throughout Your Lifetime with Emeriti 11 *See your Plan’s Summary Plan Description or talk to your benefits administrator for details. 11 10

12. Emeriti Tax Advantages in Action e.g. how to pay for annual out-of-pocket Medicare Part B premium of $1,326 Emeriti Health Account • Tax-free withdrawal of $1,326 as Reimbursement Benefit • 100 cents on the dollar Necessary to net $1,326 403(b) Retirement Plan • Taxable withdrawal of $1,841.67 • 72 cents on the dollar in a 28% federal income tax bracket *Monthly premium payment of $110.50 x 12 months = $1,326

13. Choosing Investment Options in Emeriti You are automatically defaulted into the age-appropriate Fidelity Freedom Fund if you make no choice *Pending, subject to final approval. 14

14. Program Fees While You Are Working • Emeriti service fee- $4.00/month • Fidelity recordkeeping fee- $1.67/month (deducted each quarter) • Fidelity investment management fee(Please refer to the mutual fund prospectuses for more information about the investment fees) NOTE: Depending on your employer’s plan, fees may be paid by you, by your employer, or on a cost-sharing basis. 14 26

15. Thinking About Retiring Early (before Medicare eligibility at age 65)

16. Using Your Health Account As A Pre-Medicare Retiree • Add lump sums ($100 or more) from your bank account • Set up regular electronic (ACH) transfers from your bank account for insurance premiums, if pre-65 coverage is elected * Emeriti Reimbursement Benefits Emeriti Pre-65 Coverage* Your Emeriti Health Account * Emeriti pre-65 retiree insurance available if elected by your institution 16 16

17. Using Your Reimbursement Benefit As A Pre-Medicare Retiree Reimbursement Benefits paid by using form available on www.emeritihealth.org 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. 20

18. Providing Access to Your Reimbursement Benefit *Domestic partner benefits if elected by your institution. **Determination of permanent disability also confers access to post-65 insurance. Disability must occur before majority. NOTE: Your employer’s plan establishes specific rules for vesting in the Emeriti account balance and retirement eligibility for the Emeriti insurance. 18 14

19. Thinking About Retiring After Medicare Eligibility (AGE 65 OR LATER)

20. Using Your Health Account After Post-65 Retirement • Add lump sums ($100 or more) from your bank account • Set up regular electronic (ACH) transfers from your bank account for insurance premiums Emeriti Health Insurance premiums paid automatically through Health Account Emeriti Reimbursement Benefits Emeriti Health Insurance Premiums Your Emeriti Health Account Dollars withdrawn from the Health Account are tax free for qualified medical expenses 20 16

21. When You Access Emeriti Post-65 Health Insurance NOTE: Your employer’s plan establishes specific rules for vesting in the Emeriti Reimbursement Benefit and retirement eligibility for the Emeriti Health Insurance. 14

22. Who Can Access Your Emeriti Health Insurance *Domestic partners’ coverage is available only if elected by your institution. Independent domestic partners pay for insurance outside of he Health Account. **Determination of permanent disability also confers access to post-65 insurance for these individuals. Disability must occur before majority. 22 14

23. Emeriti Provides Stability In An Uncertain Environment Emeriti will continue to adapt to Medicare changes in 2011 and beyond 23 11

24. How Medicare Works OR then add 24

25. How Standard Medicare Part D Works Catastrophic Coverage Initial Coverage Limit Coverage Gap Deductible Medicare pays 75% of drug costs ($1890) Medicare pays 95% YOU PAY FIRST $310 AS DEDUCTIBLE YOU PAY 100% OF DRUG COSTS ($3610) You pay 25% of drug costs ($630) You pay 5%* You reach the Coverage Gap at $2830. This includes your deductible and all costs in Initial Coverage Limit. You reach Catastrophic Coverage at $4550. This includes your deductible, your 25% in Initial Coverage Limit, and your 100% in the Coverage Gap. *Greater of $2.50 or 5% for covered generic (including brand drugs treated as generic) drugs. Greater of $6.30 or 5% for all other drugs. 25 18

26. How You Contribute to Medicare Costs (2010) *New Part B beneficiaries (as of 1-1-10) will pay $110.50. Beneficiaries who do not currently have the Part B premium withheld from their Social Security benefit will pay $110.50. Higher income beneficiaries will pay $110.50 plus an additional amount, based on the income-related monthly adjustment amount. 26

27. What Original Medicare Does Not Cover Emeriti Health Insurance extends Medicare coverage Emeriti Reimbursement Benefit can pay OOP expenses Full list available at www.medicare.gov NOTE: These items not necessarily covered by Emeriti Insurance.

28. Advantages of Emeriti Insurance Annual choice among options *Available in some plans. ** Varies by plan. ***With PFFS Plans, provider must accept PFFS terms and conditions. 28

29. The Aetna Advantage *Available with some plans. 29

30. Emeriti Insurance Program for 2010 Offering a wide range of medical and Rx plans, and optional dental coverage 30

31. Begin Thinking About Your OptionsMedical and Rx Exposure 31

32. With Emeriti Create Your Own Benefit Coverage Step 1 Step 2 Step 3 32 18

33. Or Preserve Your Options For The Future 33 18

34. Program Fees After Your Retirement • Emeriti service fee- $4.00/month • Fidelity recordkeeping fee- $16/quarter ($5.33/month)* • Acclaris reimbursement fee: FREEfor the first four bundled reimbursement submissions in a calendar year, $6 per bundled set of receipts thereafter • Fidelity investment management fee(Please refer to the mutual fund prospectuses for more information about the investment fees) *Reduced fees pending, subject to final approval. NOTE: Depending on your employer’s plan, fees may be paid by you, by your employer, or on a cost-sharing basis. 34 27

35. Your Next Steps 35

36. You Have Decisions to Make • If you’re retiring before age 65, be certain that you have already called the Emeriti Service Center to register your information: • The dates of birth of any eligible dependents • The social security numbers for eligible dependents • Your bank account number for electronic transfers (ACH) If you’re retiring after Medicare eligibility, be sure to call the Service Center again with additional information: • Have your Medicare Parts A and B numbers • Have your social security number • Inform the representative about the Emeriti Insurance Plan(s) in which you wish to enroll 36 1-866-EMERITI (1-866-363-7484)

37. Emeriti’s Commitment • Ongoing communication • Emeriti Service Center - 1-866-EMERITI (1-866-363-7484) • On-campus workshops • Periodic newsletters • Robust website - www.emeritihealth.org(access Emeriti’s Premium Rate Calculator) • Enrollment kits 26

38. Emeriti Retirement Health Solutions provided this information and is responsible for its content. The Emeriti Program, Aetna Life Insurance Company, Fidelity Investments, HealthPartners (in Minnesota), and Acclaris Inc., are independent corporations and are not legally affiliated. The full name of Emeriti Retirement Health Solutions is The Emeriti Consortium for Retirement Health Solution, an Illinois Nonprofit Corporation. 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. 39

39. 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. Investment Decisions It is your responsibility to select and monitor your investments to make sure they continue to reflect your financial situation, risk tolerance and time horizon. Most investment professionals suggest that you reexamine your investment strategy at least annually or when your situation changes. In addition, you may want to consult an investment adviser regarding your specific situation. Unless otherwise noted, transaction requests confirmed after the close of the market, normally 4 p.m. Eastern time, or on weekends or holidays, will receive the next available closing prices. Recordkeeping and shareholder services for the Emeriti Program are provided by Fidelity Investments Tax-Exempt Services Company, a division of Fidelity Investments Institutional Services Company, Inc. Strategic Advisers, Inc., a subsidiary of FMR Corp., manages the Fidelity Freedom Funds Before investing in any mutual fund, please carefully consider the investment objectives, risks, charges and expenses. For this and other information, call or write Fidelity for a free prospectus. Read it carefully before you invest. An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in these funds. 40

40. Understanding the Different Types of Medical Plan Options • Aetna Traditional Choice • Coordinates with original Medicare • Has a plan deductible • Offers richest level of coverage Not available in the individual market You generally pay nothing after plan deductible • Aetna Supplemental Retiree Medical Plans K and L • Supplements original Medicare • Have no plan deductible • Have coinsurance on some services • PFFS Medical Plan • Aetna provides all of the benefits of original Medicare Parts A and B • Has a plan deductible • Has coinsurance on some services NOTE: Medicare deductibles are handled differently for each type of plan. 19

41. Emeriti Group Medical Plan Options YOU SELECT ONE: In Plans K and L, you pay a portion of Part A deductibles and all of Part B deductibles. In PFFS, you are not subject to Medicare Parts A & B deductibles. In all cases you pay the Medicare Part B premium. *Availability is based on state approval. In the state of New York this group health product is called Aetna Retiree Medical Plan. 19

42. Emeriti Rx Coverage YOU SELECT ONE: 20

43. Aetna’s Medicare-approved Formularies Open Formulary (3 tiers of coverage) • Generics covered on formulary • Preferred brands covered on formulary • Non-preferred brands covered on formulary • Features at least two drugs in every class • Includes all of the top 100 drugs seniors typically use Standard Formulary (2 tiers of coverage) • Generics covered on formulary • Brands covered on formulary The number of brand drugs covered by the open and standard formulary differs.