Dependent Eligibility Verification Audits
Secova has performed many comprehensive Dependent Eligibility Verification Audits (DEVA) for higher education institutions (schools, colleges, and universities), multi-employers, and public entity groups (cities, towns, and states).
These groups have a more paternalistic benefits culture than private sector single employers and their benefit programs tend to be much “richer” than corporate benefit programs. Project planning for these groups allows for more time for health plan members to submit the required documentation and additional communications are typically employed to maximize participant response.
Of the 17 projects considered for this case study:
- 382,434 members with enrolled dependents have been audited
- 766,349 dependents have been subject to eligibility verification
- 19% of dependents have been determined to be ineligible
- Return on Investment (ROI) averaged 25:1
- Total estimated first year savings was more than $172 million
All clients share, at a minimum, the following important objectives when conducting a DEVA:
- Reinforce prior and ongoing education about the eligibility rules for enrollment in the Health Benefits Plan and communicate the process that will be implemented to determine dependent eligibility
- Maximize member response in order to limit any “clean-up” work by the client team at the close of the project and to attain a realistic Return On Investment (ROI)
- Request, collect, and retain eligibility verification documentation from members with enrolled dependents
- Provide the client with benefit cost reductions as a result of de-enrollment of ineligible dependents
The methodology behind the Dependent Eligibility Verification Audit project is to collect documentation on all enrolled dependents in a fair, accurate, and speedy manner. For most clients, documentation is collected and reviewed on all dependents (active members always, retirees typically 50% of the time) enrolled in the Health Plan benefits, to ensure equity among all members.
Projects are typically structured in the following manner:
- A 5 – 6 week planning phase beginning with an onsite/web-based video meeting at the client’s offices. Data and communications are reviewed and approved during the phase.
- A 6 – 8 week verification phase in which members are communicated with via US mail, email, text messages, IVR and live-agent calls, and documents are submitted to Secova to evidence the eligibility of enrolled dependents.
- A 3 – 4 week grace period which offers members a final opportunity to submit the required documentation prior to the de-enrollment of dependents.
One of the important success factors for any project is providing clear and consistent communications to each member, explaining the documentation required to verify dependent eligibility and the deadline for submitting these documents. Secova can work independently, or together with your broker/consultant/internal teams to provide its communications expertise in social media and pre-mailing communications (benefit bulletins, newsletters, etc.).
Examples of our success:
1.) Public Education Employees’ Health Insurance Plan (PEEHIP):
Secova conducted dependent eligibility verification for 178,927 dependents enrolled in PEEHIP health plan coverage were subject to verification.During this period, 94.64% of PEEHIP’s dependent population was confirmed eligible for coverage. An additional 1.62% of the original population was inactivated after it was determined that coverage had terminated for those dependents for other reasons. As a result, the overall non-verification rate was 3.74%.
Secova’s analysis of PEEHIP’s dependent population determined the following:
- The verification of dependents produced substantial cost reductions for PEEHIP resulting from dependents removed voluntarily or placed on claims hold due to insufficient or no documentation submitted. PEEHIP realized a savings of up to $2,859.93 per unverified dependent. The estimated first year savings was $19,138,652 with a preliminary project ROI of 20:1.
- Secova recommended continual compliance education communications about PEEHIP’s dependent eligibility rules: Although the overall percentage of unverified dependents was relatively low (3.74%), it constituted a substantial financial burden on PEEHIP. Given that more than a third of all unverified dependents were identified by members voluntarily, Secova suggested that PEEHIP send regular reminders of eligibility rules and conditions to help minimize this risk.
2.) Manchester School District:
Secova conducted dependent eligibility verification for 2,808 dependents enrolled in the Manchester School District’s health plans were subject to verification.
During this period, 92.1% of the dependent population enrolled in benefit plans was confirmed eligible for coverage. The overall non-verification rate at the conclusion of the project was 7.9%.
Secova’s analysis of Manchester’s dependent population determined the following:
- The verification produced substantial cost reductions for Manchester resulting from dependents removed voluntarily or terminated from coverage due to insufficient or no documentation submitted. The estimated first year savings was $1,527,963 with a preliminary project ROI of 54:1.
- Secova identified a potential additional cost savings by Manchester School District continuing to utilize online resources. A surprising majority of Manchester’s employees responded to the eligibility verification audit by utilizing Secova’s online Verification Station. Secova suggested that Manchester School District may want to consider transitioning their communications from primarily mail to online, thus saving in printing and postage costs.