Statistics show that as many as 15% of spouses and dependents covered under employers’ health plans are ineligible for that coverage. These individuals cost employers millions of dollars each year and contribute significantly to the rising costs of health insurance.
Employers need help identifying these ineligible individuals so they can be removed from the employer’s health plan – that’s where our eligibility verification services come in.
Also known as dependent eligibility audits, our eligibility verification services make it easy for employers to meet their fiduciary responsibilities and compliance obligations by ensuring that only eligible individuals remain covered under the employer’s health plan:
- The Employee Retirement Income Security Act (ERISA) contains an “exclusive benefit” rule that stipulates only eligible individuals may receive benefits. Corporate officers and senior management can be held personally liable for failures to comply with this rule.
- The Sarbanes-Oxley Act prohibits the “unauthorized disposition” of company resources, which includes providing coverage for ineligible individuals.
Allowing ineligible individuals to remain covered under the employer’s health plan is not just a compliance concern – it can be a huge financial issue as well, resulting in increased costs both now and in the future. That’s because the employer is contributing to the cost of coverage for these individuals now, and their collective claims experience contributes to rising premiums in the future.
Performing eligibility audits can help put an end to covering ineligible individuals while saving the employer significant money. Depending on how much an employer contributes towards the cost of coverage for dependents, an eligibility audit can result in savings as high as eight percent of total plan expenses. For some employers, that means savings of hundreds of thousands or even millions of dollars.