HMS Healthcare October 30, 2012
Many organizations experience an ROI of 1000+% the first year after conducting a Dependent Eligibility Audit of dependents on their health plan. On average, 4-8% of dependents are found not to qualify for coverage based on a plan’s eligibility rules. Imagine how much an organization could save if those ineligible dependents were never added to the health plan in the first place.
The Point-of-Enrollment (POE) solution is a relatively new approach to dependent eligibility auditing that can help employers achieve more ongoing, real-time savings. With POE, when a new employee joins a company or an existing employee adds a new dependent, the dependent’s eligibility is verified during the initial completion of enrollment data (i.e., the Waiting Period). If new dependents are found to be ineligible, they’re not added to the plan, saving the employer approximately $250 per month—what an ineligible dependent would cost the health plan (assuming an average annual cost of $3,000 per member for medical and prescription coverage).
Given the 4-8% ineligible rate, a 10,000-employee company could save, on average, $540,000 a year (assuming an annual 20% rate of employee turnover and 5% rate of family status changes). With a cost of $15 for each employee who adds a dependent, the POE solution is well worth the approximate investment of $22,500 needed to reap these savings.