Dependent Verification Saves

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Published August 2009

As healthcare costs rise, employers are looking for resources and solutions to help control these costs. Dependent Verification, otherwise known as an eligibility audit, is one way to help defer costs.

Last week Detroit Public Schools released a savings of $2.1 million a year in health care coverage cost. This was a result of an amnesty period where employees could inform the district of ineligible dependents currently covered. This two-week amnesty period uncovered 411 ineligible dependents. Michigan’s largest school district has about 13,000 employees and insures about 15,000 of their dependents, which results in spending nearly $127 million a year on health coverage. There has been no report to date indicating whether they will follow up with additional auditing or schedule a verification audit.

Dependent audits and verification used to be a process primarily used in larger organizations. This is no longer the case as companies are looking for ways to keep their employer sponsored plans viable. Now small and mid-sized companies are also checking for ineligible dependents to help ensure that they are meeting their fiduciary obligations. Many companies believe that auditing also helps to decrease future abuses.

Dependent audits and verification used to be a process primarily used in larger organizations. This is no longer the case as companies are looking for ways to keep their employer sponsored plans viable. Now small and mid-sized companies are also checking for ineligible dependents to help ensure that they are meeting their fiduciary obligations. Many companies believe that auditing also helps to decrease future abuses.

Dependent verifications/audits often uncover these types of ineligible covered dependents:

  • Deceased dependents
  • Divorced employees
  • Married dependents
  • Dependents 25 years or older
  • Double covered dependents

BASIC offers employers a cost effective Dependent Verification solution. If you are interested in learning more about our process please contact 800-444-1922 x 3 to be put in touch with a Regional Sales Director.

 

Click here to read more about Detroit school audits
Detroit school audits find millions in waste
8/5/2009 DAVID N. GOODMAN – The Associated Press