What started out in 1999 as a basic research project for Union College anthropologist Linda Evers Cool has turned into a national program to provide post-retirement health insurance to faculty and staff at participating colleges.
Linda Cool and her husband Kenneth Cool, a former administrator at Vassar College, co-founded Emeriti Retirement Health Solutions, a nonprofit consortium that has partnered with Fidelity Investments and Aetna health insurance. The program, the first of its kind in the nation, uses a defined contribution approach to pre-fund health care costs associated with retirement. Employer and employee-funded trusts that are built up – tax free – over the course of employment can be used – again, without being taxed – to pay for qualified medical expenses, including specially-designed Medicare supplemental insurance premiums after retirement at age 65 or later.
Thus far, 29 colleges and universities across the country have joined the consortium, with at least 200 more showing interest, Evers Cool said. “It's really astonishing that what started out as basic research by two people has turned into an enormous program to help thousands of people,” she said. “Had it not been for the Mellon Foundation that took a chance on this research and then was willing to underwrite the costs of program development, the research probably wouldn't have gone any further than a scholarly article or book.”
Linda and Ken Cool first applied for a grant from the Andrew W. Mellon Foundation in 1999 to do research on the broader topic of faculty retirement and the issues facing those recently retired and soon-to-be retired since the end of mandatory retirement for higher education in 1994. After receiving an initial $19,000 grant for the research, they developed a survey that was sent to more than 1,400 faculty members at 47 liberal arts colleges in the U.S.
With a return rate of 54 percent, Linda Cool said it was obvious that professors wanted to talk about retirement issues. “To our surprise, the topic that came up repeatedly was health care,” she said. “We heard amazing stories (in follow-up interviews) about how people are afraid to retire due to the cost of health care and their fear that they won't be able to find good health insurance. There was even a woman who has cancer and continues to drag herself to work for fear of losing her insurance.”
With this data, the Cools returned to the Mellon Foundation for funding and ultimately received more than $6 million over four years to examine the problems associated with retiree health and to develop a healthcare program to meet the needs of retired faculty and staff. Their work involved forming a national team of experts from the health insurance industry, financial services firms, Medicare and medigap insurance, chief financial officers and college administrators to develop a model that would later be approved by the Internal Revenue Service and the Securities and Exchange Commission, among others.
On Tuesday, May 24, the program was unveiled at a news conference in Boston.
“This program not only helps retired people, but also the institutions,” Evers Cool said, since colleges either foot the bill for retiree health insurance or have to keep older and higher paid employees on the payroll because the employees fear high-cost private health insurance will eat away their retirement savings. “There are always push-and-pull factors at play as people contemplate retirement. Among faculty who told us that they felt ready to retire, concerns about the cost and availability of retiree health insurance were keeping them working full time,” she added. “This program may alleviate some of those concerns.”
The Cools hope that this initiative will spur other nonprofit organizations as well as corporations to offer such health care funding plans to their employees. “I truly believe this type of program will help transform medical benefits for retirees in this country and might help save Medicare,” Evers Cool said.
Evers Cool, who served as Union's Dean of Faculty for five years in the 1990s, previously was associate academic vice president at Marist College and a faculty member at Santa Clara University. She has been studying gerontology for nearly her entire career and currently teaches the course, “The Anthropology of Aging.”