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Market Volatility, Election Causing Employer Uncertainty around Pre-65 Retiree Health Care Strategies
Aon data reveal majority of employers are taking a “wait and see” approach


LINCOLNSHIRE, Ill., September 15, 2016 – In light of recent Affordable Care Act marketplace plan and premium volatility and the upcoming election, only 13 percent of employers plan to move forward with their pre-65 strategies regardless of the election’s outcome, according to a new pulse survey from Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON).

Aon’s pulse survey of 70 employers conducted in mid-August found that just 9 percent of employers plan to move their pre-65 retiree population to the individual market―most likely accompanied by an employer subsidy―and 4 percent plan to eliminate pre-65 retiree coverage altogether, regardless of the election’s outcome. Thirty percent of employers said they will delay making any pre-65 strategy changes until after the election, and more than half (58 percent) are uncertain whether their retiree health care strategy will change.

“Federal health care reform has created the impetus for change to enable employers to consider new solutions like individual market, exchange-based strategies to help support retiree benefits,” said Jane Funk, senior vice president and retiree exchange leader at Aon Hewitt. “While many employers are reviewing their health care strategies for pre-65 retirees, many are holding off on making any major changes given the uncertainty surrounding the election’s outcome and  what the impact may be on  the Affordable Care Act, public exchanges, Medicare and Medicaid.”

According to a separate Aon survey of 229 plan sponsors representing approximately 3 million retirees, just 6 percent of employers are currently leveraging public marketplaces for their pre-65 strategies and another 34 percent are considering doing so in the next three-to-five years.

“Many employers considering a move to the public marketplaces are also holding off on their decision because of the market volatility occurring in the pre-Medicare market,” explained John Grosso, actuary and leader of the Aon Hewitt Retiree Task Force. “This is likely to continue until we see the individual market become more stable and mature, regardless of what happens during the election.”


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