The Aon Retiree Contingent HRA better aligns employer and retiree cost-management objectives and encourages retirees to make efficient health plan choices in the individual market, Aon says. It allows employers that are moving retirees to the Aon Retiree Health Exchange to structure the HRA reimbursement so that it aligns with actual retiree health care needs. It leverages the plan choice architecture and administrative capabilities of the Aon Retiree Health Exchange to deliver the tax-free reimbursement to retirees and market areas that need it the most, and away from more efficient market areas that can deliver greater value to retirees without significant employer funding. According to Aon Hewitt, this creates a more efficient and cost-effective overall HRA strategy and eliminates much of the waste associated with traditional HRA approaches.
“While many employers considering a move to an exchange-based individual market health care strategy want to maximize their savings, they also want to ensure their retirees can share in those savings,” says John Grosso, actuary and leader of the Aon Hewitt Retiree Health Care Task Force. “Our new HRA strategy provides more opportunities for a stronger ‘win/win’ outcome and can generate greater employer savings than traditional HRA approaches. It creates a financial incentive for retirees to find value in the individual market through the Aon Retiree Health Exchange, as opposed to using employer reimbursements to simply purchase high cost, first dollar coverage that most retirees don’t actually need.”
The Aon Retiree Health Exchange provides access to more than 90 health insurance carriers and 3,700 different plans, and includes a highly personalized retiree enrollment experience to help guide retirees and their families through the process of selecting and enrolling in health coverage.