Plan Design Cost Modeling

AFAS can provide you with longer-term cost modeling of your current health and welfare benefit plan and cost structure to better help you understand how your current strategy will fair under ACA. This analysis will assess your risk of Employer Mandate penalties today and for the next six years as well as the impact of the Excise Tax on High Cost Plans (Cadillac Tax). Additionally, we will model alternative scenarios for your consideration. This analysis is helpful in understanding your alternatives and making strategic changes now and incrementally over the next few years in anticipation of upcoming health care events (like the Cadillac Tax).

Our analysis will provide a risk assessment under your current plan design and contribution structure of the “substantially all” requirement (the requirement that you offer coverage to substantially all of your full time employees or risk a penalty of $2,000 times all full-time employees) and the requirement to offer adequate and affordable coverage. Additionally, we will assess how your plan compares against the minimum value requirements (e.g., 60% actuarial value).

Our long-term cost modeling will use this information along with your current design to make a 6-year projection and include alternative scenarios that compare different strategies for your consideration. These alternative scenarios include options for handling employees who are newly eligible for benefits as a result of meeting the Federal definition of a full-time employee as well as looking at alternative employee contribution structures and plan designs to reduce costs and/or mitigate the risk of Employer Mandate penalties. Our report provides each alternative in detail and compares against your current state design.

Our consultants will meet with you and key stakeholders in your organizations for two 2-hour meetings to review results and answer all questions. Our services include:

  • Employer Mandate Risk Analysis
    (substantially all requirement, plan adequacy, and affordability testing)
  • Potential cost impact
    to the employer and employee with a 6-year projection of the current design and 6 alternative scenarios.
  • Seven scenarios include:
    Current state design, alternative to handle employees who become defined as full-time under ACA rules, adding a lower cost design option, and alternative employee contribution scenarios.
  • Two 2-Hour Strategy Sessions
  • Insights and Considerations
    for change to manage risks and reduce costs in short- and long-term.
  • Discussion of Market Trends
    (AFAS survey data, wellness programs, contribution strategies, etc.).


  • Detailed reporting showing potential risks of Employer Mandate penalties under IRC Section 4980H(a)
  • Report with charts and graphs showing projections into 2025 under current state plan and seven alternative scenarios including the impact to the employer, the employees and the potential financial effect of the Cadillac Tax.
  • Two, 2-Hour strategy sessions.

Neither American Fidelity Assurance Company nor American Fidelity Administrative Services provides tax or legal advice and, given the complexity of these laws, we always recommend working with your legal counsel on how the laws impact your specific situation.