Ongoing Dependent Eligibility Audit
After a full Dependent Audit is performed, there will still be instances where employees may need to go through the process. Throughout the year, there are several circumstances where new dependents can be added to a benefit plan. These can include:
- life events
- new hires
- open enrollment
- acquisitions
Ongoing Audit Processes
There are several options for ongoing reviews of dependents on benefit plans. As you consider your options there are a few key items to think about:
- How frequently should ongoing reviews be performed?
- How much administrative oversight will be needed?
- What population should these reviews include?
- What method of review is appropriate?
Frequency and Administrative Oversight
Frequency of auditing should be determined by the volume of newly added dependents to coverage over a period of time. Some employers choose to review eligibility as new dependents are added to coverage. This allows employers to ensure that a dependent is eligible at the time of enrollment. However, it does require a fair amount of administrative oversight as each piece of documentation must be reviewed and tracked in order to ensure no one slips through.
Other employers choose to conduct periodic reviews of dependents at specific intervals of time. This approach requires less administrative oversight on an ongoing basis but does require a more timely commitment during the predetermined audit periods. Periodic audits should be conducted at a minimum on an annual basis.
Still, other employers decide to do nothing for a set amount of time (usually 3 years) and to then perform another complete audit of all dependents enrolled in coverage a few years down the road. Administrative oversight is still required for planning the project and for review of any unique situations that may arise.
HMS suggests ongoing services on a monthly, quarterly or annual basis to ensure accurate dependent eligibility records without adversely impacting all employees with dependents once again.
Population and Methodology
Those employers that choose to begin requesting documentation from each employee as they join the plan should be consistent with what was required for the complete audit to ensure all dependents are treated fairly. Please note that 2010 Health Care Reform changes eliminate the need to validate support of a dependent child.
Employers that choose to conduct periodic reviews of dependents focusing on newly added dependents over a specific time or a randomly selected group of dependents, does not require significant changes to the enrollment process. At the beginning of each periodic audit all dependents who meet the criteria (newly added or random selection) are asked to provide the documentation required to prove their eligibility. Existing dependents that may be chosen are asked for documentation that verifies they still qualify as an eligible dependent.
The employers that choose to wait for a period of time to complete another full audit should require similar documentation to what was required during the complete audit. This is the least desirable approach from both a cost containment and Plan compliance standpoints as there is a significant period of time during which ineligible dependents will have had access to healthcare coverage. As an outside vendor is typically chosen for this approach, administrative oversight is less of a challenge although costs involved for a complete audit may prove this approach to be less desirable overall.
HMS is able to provide a customized ongoing services program that would house and maintain all eligibility information and keep all prior documentation in order to track verification appropriately.
Remember, when conducting Ongoing Audits, you still need customer service staff and to ensure a high level of security.
