Employers routinely pay too much for health benefits. These overpayments have nothing to do with high premiums for medical and dental coverage. Unnecessary charges are common due to mistakes in enrollments, changes and termination of coverage. An audit of benefits bills that compares enrollment data with statements can catch errors and save significant sums.
Pay special attention to the following items:
Are the billed rates correct?
Take out up to date contracts for all of the plans and check each rate and category. If you have more than one offering from the same provider check each one. Are rates for single, family and any other tiers of coverage accurate? I have found discrepancies in favor of the employer.
Are employees in the right bucket?
Using a list of eligible employees and the coverage they selected make certain that you are being billed for the right plan. When there is more than one option employees can be enrolled by the carrier in the PPO when they chose the HMO. Similarly employees with coverage for a parent plus children can be categorized as having family coverage if your plan rates include multiple tiers.
Are terminated employees still listed as active?
The most common mistake I find is employees remaining on the bill long after they have left the job. If a departing employee chooses to continue coverage under COBRA they should be listed separately on a bill under this category. When they are included in a long list of employees it makes it harder to check when their coverage does end. This is particularly important with the potential increase in COBRA participants due to the enhanced benefits option in the economic stimulus plan.
When you are still being billed for terminated employees, or employees who dropped coverage, notify the plan immediately of the coverage end date. Many plans will not give credit if the termination was many months earlier. Even if you use a COBRA administrator notification of the end of coverage is likely to be a separate step required by the employer. It is frustrating when a participant is not taken off a plan for six months, the employer is paying for nothing, or the individual may be using benefits they are not entitled to.
Let the Provider Make the Adjustments
When you correctly terminate employee coverage the change may not show up on the subsequent invoice. Keep track of changes and let the provider make the adjustments. It’s too easy to make errors when you try to apply credits yourself. When the invoice never matches the payments made there are continuing arguments about correct payments and it is only harder to track.
These tips are the basics for the non-financially oriented. Complete the steps on a regular basis to catch discrepancies before they pile up into hefty charges.