Cost Containment through Dependent Eligibility Audits

With the cost of health care rising each year and new health care regulations, employers are searching for new and innovative ways to reduce costs while still maintaining benefits coverage. More Employers Health members are turning to a proven, cost-cutting strategy called a Dependent Eligibility Audit.

Dependent Eligibility Audit is a process that verifies that dependents enrolled in your organization’s health and welfare plans are eligible to receive coverage from your plan(s). Many employers believe that ineligible dependents are not a problem for their organization. However, between 4 percent and 8 percent of currently enrolled dependents are typically not eligible for the coverage employers are providing. An ineligible dependent can be an ex-spouse, a grandchild, or even a niece or nephew. These ineligible dependents are increasing your organization’s costs, the cost to your employees and could also be compromising your plan's adherence to ERISA and public trust compliance mandates. Further, with the onset of ACA fees, identifying and removing ineligible dependents becomes even more important.

Employers Health member organizations that have conducted such audits have saved a significant amount of money. On average, you can expect a return on investment within one year of 400 percent to 1000 percent depending on the size of your organization. Small- and medium-sized fully funded groups are executing these audits as well as their larger, self-funded counterparts. Every employer has the opportunity to save dollars year after year no matter their size. Many employers are now combining this process with their onboarding protocol as well, which can prevent ineligible dependents from joining plans from the start of employment. 

Employers Health / HMS Relationship

Employers Health has reviewed the providers of these services and chosen to engage with HMS. This engagement provides members with preferred pricing on dependent eligibility services, while decreasing the procurement cost to each member company that would be needed to vet multiple service providers.

Click here to learn how you can begin cost containment through a Dependent Audit.