HRadvance eNewsletter

Plan-Smart: Dependent Eligibility Audit Verification Solutions

Plan-Smart ROI Calculator

What is the cost-savings on auditing your dependents? The HRAdvance’ Plan-Smart ROI Calculator is a tool designed to answer questions about your potential cost-savings.

Did you know the average audit returns more than 300% ROI which is literally hundreds of thousands of dollars per year? Check out your potential cost savings here.

.DO THE MATH: An employer with 1,000 employees enrolling an average of two dependents per employee could save over $200,000 annually by identifying and removing ineligible dependents from its health plan.

Why Do a Dependent Eligibility Audit?

Reduce expenses on your Medical Plan without changing the plan design or employee contributions. Compelling economics: typical results indicate 5% - 15% ineligible dependents are enrolled on employer health plans which translates to hundreds of thousands of dollars per year in cost savings.
Fiduciary responsibility to stakeholders and plan participants
1. Exclusive Benefit Rule (ERISA)
2. Section 125 exposure (pre-tax deductions not allowed for ineligible participants)
3. Audit Controls such as Sarbanes Oxley compliance issues for public companies
Through employee communication builds the value and perception of your companies benefits being provided to them. Plus employee awareness sets a tone from the top that company provided healthcare is a privilege, not an entitlement and fraud is not tolerated.

A Case Study in Savings:
Dependent Eligibility Audit

An independent manufacturer in Dallas, TX saved nearly half a million per year on cost of less than $300 per dependent per month in two steps:

First, by identifying ineligible dependents and removing them from the health care rolls.
Then, the company communicated a revamped policy to employees and instituted an ongoing gatekeeper audit solution.

● Eligibility Quality Controls
● What Can Go Wrong?

“The main driver in 2009 is cutting wasteful costs,” says Brennan Clipp, senior vice-president at HRAdvance. “Our web-based (SaaS) verification solution audits dependents and returns hundreds of thousands per year in savings.”

Many companies have exhausted alternatives that produce impact savings (redesigning benefit packages can only go so far). Dependent eligibility audits have become the activity do-jour as several hundred US based companies conducted audits last year to achieve immediate health care savings.

“Audits usually reduce the number of dependents by between 3 percent and 15 percent,” says Clipp. “You can go through plan changes, adjust contribution rates. Some of our clients have seen dependent enrollment dropped by as much as half.”

One such client is Holly Corporation, a producer of high-value products such as gasoline, diesel fuel and jet fuel, operates in New Mexico, Utah, Texas, and Oklahoma.

Holly Corporation Plan-Smart™ Dependent Eligibility Audit:
Holly Corporation is committed to providing a competitive health plan for our employees and their families. Their dedicated management team understands that employees are #1 asset and it is critical to maintain a comprehensive and fiscally healthy benefit plan in order to hire and retain top talent.

Holly Corporation realized that we have a fiduciary responsibility to our plan participants and shareholders to uphold and enforce the eligibility rules.

Holly Corporation assessed the vendors in the marketplace that perform dependent eligibility audits and verifications and we chose HRAdvance to perform our dependent eligibility audit and verification. HRAdvance was the only company whose service was designed to ensure associates were supported throughout the process.

The audit itself is straightforward. It began by first explaining to employees what it was doing and why. Employees are told to answer a questionnaire on a secure Web site by a certain date or risk having their dependents eliminated from the plan.

Holly Corporation was surprised to find 2% ineligible during the first few weeks of our audit and this number continued to escalate. Download the full case study here.