Date post: | 12-Jun-2015 |
Category: |
Health & Medicine |
Upload: | cbiz-inc |
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Dependent Eligibility Audits
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Newer Alternatives for Lowering Health Care Costs
Fully Insured and/or Self Funded Plans
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OBJECTIVE
To insure that employees who claim dependents on the employer-sponsored health plan are truly eligible dependents based on the definition of a dependent as outlined in the Plan Document
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Presentation Overview
The stages to a Dependent Eligibility Audit are:
1. Planning
2. Common Objections
3. Communication
4. Documentation
5. Data Accumulation
6. Results/Findings
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Presentation Overview (cont’d)
1. Planning• Audit Format• Overall Project Goals and Objectives• Timeline: ideal prior to open enrollment
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Presentation Overview (cont’d)
2. Common Objections• Trust issues from employees as this is a delicate
undertaking• Initial reaction to cost of the project• Sensitivity in a union environment
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Presentation Overview (cont’d)
3. Communication is KEY• Amnesty Phase – no disciplinary action• Structure of communication to fit corporate culture• Additional phases as applicable
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Presentation Overview (cont’d)
4. Documentation Gathering & Authentification • Burden is on the employee to prove that a covered
dependent is actually entitled to coverage
- That usually means providing documentation such as copies of marriage certificates, birth certificates, adoption agreements, income tax returns and letters from colleges.
• Type of documentation, FAQ’s, examples• Onsite authentication vs. documents mailed, faxed, or e-
mailed
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Presentation Overview (cont’d)
5. Data Accumulation• Call Center or an experienced live team available to
answer employee questions regarding the audit, acceptable documents, etc.
• Tabulate responses from employees’ and maintain in a database
• Analyze responses and provide summary of findings
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Presentation Overview (cont’d)
6. Results • Cost benefits to employer
– Reduce health care costs– Lower future administrative costs– Lower Premiums– Lower cost for employee share with savings
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Business Impact
• ERISA Fiduciary Compliance• Return on Investment• Without a process in place to protect an employer’s
health plans, covering ineligible dependents will continue to put the organization at risk
• Employees who cover ineligible dependents not only increase the cost for the employer and fellow employees, but also contribute to eroding an organization’s ethical standards.
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Business Impact (cont’d)
Options for measuring ROI• Calculate future reinsurance premiums and/or
administrative costs on a go-forward basis• Calculate actual or expected claims paid for ineligible
dependents• Seek restitution from employees for ineligible
dependent(s)’ claims previously paid, or for premiums and administrative fees
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Business Impact (cont’d)
ERISA Fiduciary Compliance
• Plan sponsors have a fiduciary responsibility to minimize risk to the health plans
• Plan sponsors’ failure to protect the health plans from exposure caused by covering ineligible dependents is a violation of the fiduciary responsibility as defined by ERISA.
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QUESTIONS & ANSWERS
For more information, call:
Phyllis Hoff
(314) 692-5887