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Board hears Aon Hewitt service plan, new lead actuary and a briefing on IRC Section 125 rules
Summary
Aon Hewitt presented its client service plan and introduced lead actuary Mike Clark; Commissioner Breslin pressed for transparent, independent actuarial reporting. Staff and Aon also reviewed Internal Revenue Code Section 125 rules governing cafeteria plans, midyear election limits, and the tax consequences of noncompliance.
Juan Anderson of Aon Hewitt presented the firm’s client‑service framework and transition plan after staffing changes, emphasizing executive sponsorship, a team approach to knowledge transfer, and monthly communication with SFHSS staff. "We have a proven process of transferring knowledge to ensure that nothing gets dropped or falls through the crack," Anderson said.
The board requested reintroduction of the new lead actuary. Mike Clark, introduced at the meeting, described his recent work on SFHSS data and early analytic work looking ahead to 2019. "I've been spending the last two months getting very immersed in the data," Clark said, and he told the board he would act transparently and collaboratively in his role.
Commissioner Bart Breslin sought stronger governance around actuarial selection and full transparency of actuarial reports, saying he had concerns about prior reserve‑policy treatment and the independence of actuarial analyses. Clark responded by assuring the board of his ethical and transparent practice.
The agenda next moved to Internal Revenue Code Section 125 (cafeteria plans). Acting Executive Director Mitchell Griggs and Aon reviewed the plan‑document requirement, annual open enrollment timing, allowable midyear election changes for qualifying events (marriage, birth, gain or loss of other coverage) and HIPAA special‑enrollment rules. Presenters warned that failure to comply with Section 125 could disqualify a cafeteria plan and cause pretax benefits to become taxable to employees.
Board members asked how compliance is determined; presenters said compliance testing and audits are performed (the Department of Labor may audit employer‑sponsored plans), and SFHSS conducts operational metrics and dependent‑eligibility verification. Griggs noted the HSS plan document is updated annually and a full open‑enrollment report will be presented at the December meeting.
No vendor contract or governance change was adopted at the session; the board used the presentation to press for future transparency and follow‑up.
