Employers see greater health care savings through dependent eligibility audits: Ceridian

Ceridian Corporation, a leading provider of managed human resource and employee benefits administration services, announced today that employers are seeing greater health care savings through dependent eligibility audits as the cost of providing medical coverage for their employees and their dependents continues to rise.

“In just the past 90 days, for instance, we've supported 12 customer audits through our new solution and we've lowered plan costs for these clients by more than $1.3 million by identifying their ineligible dependents.”

Ceridian's most recent audits show an ineligible dependent adds an average of $4,142 in additional cost per year to a health care plan.

"Employers are realizing just how much money the audit process can save, especially now," said David Wirta, Senior Vice President of Sales and Marketing for Ceridian Benefits Services. "They're beginning to see that removing excess costs associated with ineligible dependents will help them offset any increases in plan costs they expect under health care reform."

Ceridian, which has offered dependent audits for more than a decade, launched a new release of its verification services earlier this year to make it easier for employees to submit proof of their dependent's eligibility and to give employers greater transparency into the health care savings identified by the audit.

Wirta said he has seen a significant increase in the number of employers conducting audits, which are typically completed within 90 to 120 days. He's also seen an increase in savings.

"In just the past 90 days, for instance, we've supported 12 customer audits through our new solution and we've lowered plan costs for these clients by more than $1.3 million by identifying their ineligible dependents."

Ceridian estimates that between 5 percent and 10 percent of enrolled dependents do not meet the eligibility requirements of their health plan, costing American companies an estimated $22 billion annually.

Dependent audits are becoming more popular as a cost-containment tool because of provisions within the Patient Protection and Affordable Care Act (PPACA) that call for expanded coverage and fewer restrictions in health insurance plans. This will likely increase premiums and claims costs across the board.

In addition, many employers are preparing for the January 1, 2011, expansion of health care coverage to adult children under PPACA. Adult children will be allowed to remain on their parents' plan to age 26, which expands the pool of eligible participants.

"More and more employers are conducting audits as a way to catch potential problems before rolling out their new plan designs under health care reform," Wirta said.