Employers

Many employers have found that Dependent Eligibility Audits can dramatically reduce their healthcare costs year after year. During the last few years employers have been facing unprecedented financial challenges. Healthcare costs have continued to rise and the economy has wreaked havoc on the financial strength of many employers. In addition to the financial struggles that face employers today, employers are also required to be more vigilant than ever about compliance. ERISA and Sarbanes- Oxley both have provisions that demand higher levels of controls over healthcare spending and reduction of risk.

When employers moved to self-service enrollment systems, many no longer required supporting documentation for enrolling dependents. Most included some form of attestation during the enrollment process where the employee would acknowledge that they had reviewed the eligibility rules and affirmed that their dependents were eligible.

Unfortunately, for employers, paying for the health benefits of individuals who are not eligible is more common than expected. Roughly between 5 percent and 10 percent of your employees’ dependents will be identified and permanently removed during the course of a through Dependent Eligibility Audit.

With Healthcare reform and other such provisions, it is very important for employers make sure every dependent they are covering is actually eligible for coverage.  The shift towards mandating that employers provide dependent coverage later into a young adult’s life will result in higher costs for employers.