The Impact of the ACA on Dependent Eligibility

Posted on: October 18th, 2012 by hmshealthcare

As a result of the Affordable Care Act (ACA), group sponsored health plans are now required to extend coverage to more individuals and loosen eligibility requirements. For this reason, ensuring that covered dependents are eligible under plan guidelines is as critical as ever, if not more so. Health plan costs are soaring, and employers must use every tool available to protect their plan(s) from unnecessary claim expenditures.

Our data shows that 8-10% of all dependents audited may be ineligible, which typically results in more than a 2,000% ROI for employers. With the complexities of the eligibility rules around “grandfathered” plans and more employers adding working spouse provisions, we have seen an increase in the number of dependents removed as a result of an audit.

Here are some “before and after ACA” statistics to consider: 

Enrolled Dependents Unverified Dependents  Voluntarily Reported Ineligible Dependents  Unverified Dependent Savings Voluntarily Reported Ineligible Dependents Savings Total Savings
Pre
ACA
10,000 400 300 $1,200,000 $900,000 $2,100,000
Post ACA 10,000 800 200 $2,400,000 $600,000 $3,000,000

 

Assumptions:

  • 10,000 enrolled dependents audited with a 95% total response rate
  • Unverified dependents do not complete the process; 1-3% may appeal and return to the plan 
  • Voluntarily Reported Ineligible Dependents are reported during the audit process
  • Savings are based on $3,000 annual cost per dependent
  • Savings are annualized

The simple fact is, the eligibility rules governing your plan—regardless of how strict—are not what determine whether or not ineligible dependents are enrolled. It is the way those rules are interpreted and administered that puts your claim expenditures at risk.

 

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