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House Co-Sponsorship Memoranda
House of Representatives
Session of 2013 - 2014
Regular Session
MEMORANDUM
| Posted: | June 28, 2016 04:19 PM |
|---|---|
| From: | Representative Marguerite Quinn |
| To: | All House members |
| Subject: | Dependent Eligibility Verification Audit |
| In the near future, I will be introducing legislation to enact an audit to determine dependent eligibility in group health insurance plans for state employees and retired state employees. The ever increasing cost of healthcare is putting a strain on our state’s finances and is contributing to annual increases in each agency’s GGO line. It is important to ensure that those receiving health benefits being paid for by the taxpayers are actually eligible to receive those benefits. Health insurance premiums are set annually based on the number and nature of claims made in the previous year. Therefore, it is a critical cost control measure to determine that only eligible claims are being processed. To that end, dependent eligibility audits have become common in the private sector. Whether a company has 75 or 75,000 employees, there is almost always “slippage” in the eligibility rosters, with the error rate typically between 3%-8%. The overwhelming number of errors are not fraud, but innocent mistakes; however, they certainly add up in terms of premium increases. States that have conducted these audits have realized cost avoidance savings in the millions of dollars. The return on investment for counties, school districts and private companies that have completed the dependent benefit audit process have proved that this is an area in which savings going forward can be found. Examples of this run the gamut from the $600,000 cost avoidance savings found in Bucks County’s 2013 audit, to the $122,000,000 cost savings of CALPERS (California Public Employees' Retirement System), one of the nation’s largest government benefit systems, as reported in late 2015. A dependent eligibility audit makes sure a benefit plan is compliant. I believe an eligibility audit not only is good practice, but also our fiduciary responsibility to our taxpayers. Thank you for your consideration of my proposal. |
Introduced as HB2262