|
Fall is upon us. While the rest of the world is eagerly anticipating the upcoming holiday season, HR professionals find this the busiest time of the year. For many of us, Fall is the time for strategizing and planning for the next year's Benefit plans. Since double digit trend seems to be the norm, many of us close our eyes and brace for that crushing wave of rising cost to hit our plans. What can be done that hasn't already been done in the past?
The latest strategy to curb cost is Dependant Eligibility Audits. They can deliver immediate savings to health plans without altering the benefits provided.
The most traditional method used to verify dependent eligibility for health plans today is the honor system. Due to a number of reasons, 2-8% of these dependents may not actually be eligible for coverage – marital status, death, beyond the age limit, or they simply don’t meet the criteria set out in the plan.
What does a Dependent Eligibility Audit entail? It generally starts with an amnesty period. Employees are reminded of the eligibility guidelines for their dependents. Most employees who enroll an ineligible dependent in their benefit plan are not trying to deceive their company, but may not fully understand the eligibility criteria. The employees are given a time period to self-report ineligible dependents enrolled. There is generally no penalty or financial consequence for employees who self-report relative to past paid claims.
Next step? Documentation phase. Employees with dependents enrolled on the benefit plans are required to provide birth certificates, marriage certificates, tax returns or other documentation for proof of eligibility. At the deadline, dependents not proven to be eligible are terminated from the plan. Some employers impose penalties including mandatory repayment of claims, or even termination of the employee.
This audit is a sensitive project and requires careful attention to employee relations and clear communication. It requires a great deal of time to manage the project, develop guidelines and communication materials, handle employee questions, and report changes back to insurance carriers. Outsourcing this project is a good option, insulating the employer through third-party objectivity and helping preserve employee goodwill. The initial and ongoing savings to employer’s benefit plans will be more than enough to justify the expense.
Marva DeVault
Senior Vice President
Willis of Texas, Inc.
972-715-6274
marva.devault@willis.com
www.willis.com
Return to October
Horizon
|
