H&W: Who is Auditing Dependent Eligibility?

Who is Auditing Dependent Eligibility?: Under PPACA, group health plans must allow a participant’s dependent child to remain eligible for coverage until the child’s 26th birthday, regardless of any traditional dependency factors such as the child’s full-time student status, marital status, employment status, residency, or financial dependency. Prior to this, an employer’s insurer or TPA would often take on the responsibility of verifying dependent eligibility as part of the claims administration process or through a separate audit. Since these entities no longer have to worry about most dependent eligibility factors, they may not be performing these eligibility checks.

However, many employers offer other benefits that may be considered “excepted benefits” and fall outside of this PPACA mandate, such as certain dental or vision coverage. In these cases, employers should closely check the dependent eligibility terms for this coverage to see if it is more restrictive than the terms of the group health plan. If so, employers should ensure they are monitoring this dependent eligibility criteria, whether through internal processes or outsourcing the task to a third party.

This type of dependent eligibility audit can often create significant cost savings by ensuring that benefits are being offered only to eligible dependents as defined by the benefit policies.