With employers looking to save money on health benefits, more and more companies are turning to health plan dependent eligibility audits, according to a recent survey by Mercer.
Mercer said Thursday, April 9, that it is seeing a “dramatic rise” in the number of inquiries and new business involving health plan dependent eligibility audits, which are intended to verify the eligibility of dependents covered by an employer’s health plan.
The number of businesses conducting audits has nearly doubled every year since 2006, New York-based Mercer said, with additional growth expected to occur this year.
Mercer estimates about 3 to 8 percent of family members covered under an employer health plan cannot produce valid verification of eligibility, which translates into a significant cost for employers. The average annual cost of providing health insurance for one dependent is $1,900 a year, according to Mercer.
“Plan sponsors have a fiduciary duty to administer their health plan in the interest of eligible participants and their eligible dependents, known as the ‘exclusive benefit rule,’ ” said Dan Priga, national business leader of Mercer’s performance audit group, in a statement. “In addition to spending money on nonqualified participants, [plan sponsors] risk running afoul of federal requirements. … Such negative outcomes can be avoided by the careful management of dependent eligibility.”
Filed by Jeff Casale of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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