Upfront: Monitoring Health-Care Eligibility

As companies continue to seek new, innovative methods for reducing the cost of employee health-care coverage, they may be overlooking a very simple way to ease the burden. Pruning ineligible individuals from health-care rolls can significantly reduce the benefits bill.

According to MaryAnne Watson, Phoenix-based national practice leader for claims audits at The Segal Company, ineligible people fall into two categories: individuals who are ineligible for coverage based on plan rules and those rendered ineligible by a change in circumstances. To remove ineligibles from health-care rolls, Watson recommends that employers do the following:

• identify dependents who are improperly receiving benefits, such as divorced spouses, overage dependents, children with no legal guardianship, married children, and unmarried partners with no recognized relationship under the plan
• identify employees rendered ineligible by a change in circumstances, such as employees still registered as active after they have retired and are receiving Medicare payments
• establish procedures for documenting and regularly reviewing dependent status and change in circumstances, and set up procedures for offering a grace period to allow employees to update records