HMS Healthcare January 24, 2013
There are two main reasons employers choose to conduct a dependent eligibility audit – compliance and cost containment. Cost containment is the most popular reason, and with good cause: a health plan can experience significant savings — up to $3,000 annually per dependent for self-funded plans — by removing ineligible dependents from the plan. This notable savings potential is a big driving force for self-funded plans to hire vendors to complete a dependent eligibility audit.
What is often overlooked is the fiduciary responsibility that employers have to offer health coverage only to dependents who are eligible for the plan. By conducting a dependent eligibility audit, fully insured employers can make sure they are in compliance. They may also achieve substantial savings as tier shifts occur when ineligible dependents are removed. Although fully insured employers won’t likely see the 1,000-1,200% ROI that self-funded employers typically achieve, a 200-500% ROI is certainly within the realm of possibility. The savings and compliance potential make dependent audits a smart choice for fully insured plans.