Sees Significant Growth In Health Plan Dependent Eligibility Audits
In the midst of unprecedented economic challenges
and ever-increasing healthcare costs, Mercer is seeing a dramatic rise
in the number of inquiries and new business involving health plan
dependent eligibility audits, which are designed to verify the
eligibility of dependents covered by an employer’s health
Since 2006, the number of Mercer-conducted audits
has more than doubled every year, with more growth expected this year.
The immediate and long-term savings gained from
these audits can be substantial.
Mercer conservatively estimates that 3 to 8
percent of covered family members (spouses and dependents) cannot
produce valid verification of eligibility during an audit. This can
translate into significant costs for employers, with $1,900 being the
average annual cost of providing health coverage for one dependent,
according to an estimate based on data from Mercer’s National
Survey of Employer-Sponsored Health Plans.
"Health plan dependent eligibility audits allow
plan sponsors to identify ineligible dependents and then take action to
ensure that only those dependents eligible for benefits are enrolled in
a given plan. Particularly, with so many companies looking to cut costs
any way they can, more and more are coming around to the fact that
monitoring dependent coverage equates to sound financial management,"
said Dan Priga, national business leader of mercer’s
performance audit group.
"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. So in addition to spending money on
nonqualified participants, they risk running afoul of federal
requirements as well as the Internal Revenue Code. Such negative
outcomes can be avoided by the careful management of dependent
eligibility," added Priga.
"Mercer applies a rigorous dependent audit process
that involves strategic planning, detailed employee communications, and
summary reporting," explained Rich VanThournout, health and benefits
business leader for Mercer’s outsourcing business. "Because
there can be employee relations challenges with an eligibility audit,
Mercer also offers call center support and an intuitive employee Web
site to help educate and support employees throughout the eligibility
confirmation process. This approach helps ensure that dependent audits
are as fair and effective as possible, while also helping to educate
employees about rules surrounding eligible dependents and cost of
Address: Mercer, 1166 Avenue of the Americas, New
York, NY 10036; (212) 345-7000, www.mercer.com.