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Aon Hewitt warns HSS of Cadillac excise tax exposure; recommends proactive modeling
Summary
Aon Hewitt briefed the board on federal tax developments affecting employer plans, including potential repeal of the individual mandate and uncertain implementation of the Cadillac excise tax; Aon’s modeling shows possible exposure for some HSS plans beginning in 2020 under current assumptions.
Aon Hewitt consultants Juan Anderson and actuary Mike Clark briefed the HSS Board on recent federal developments that could affect employer-sponsored health plans, including a new tax bill reported on the day of the meeting and ongoing Senate dynamics.
Anderson summarized the legislative situation, noting a likely repeal of the individual mandate and the possibility of delays or suspensions for taxes such as the Cadillac excise tax. Mike Clark presented early modeling under current assumptions and said that, absent regulatory guidance, some HSS plans (notably certain Blue Shield pre-65 coverages under the modeling assumptions) could face excise-tax exposure if the tax is implemented in 2020. Clark provided illustrative 10-year present-value exposure figures (which the presentation described as illustrative and subject to substantial regulatory guidance).
Board members asked whether prior plan design decisions reduced exposure; staff and Aon noted proactive monitoring and that further modeling and possible mitigation options will be developed for board consideration if the tax remains likely to be implemented.
