Proof of Dependancy Required

Don D · July 2003

Beginning July 1, nationwide we started requiring new ee's bring in proof of ralationship anytime they attempted to add a spouse or dependant to our group insurance. Additionally, we are about to open a three month window during which time every ee in the company must do the same, no exceptions. Birth certificates, marriage licenses, DNA test results, court documents in some cases, are some of the acceptable forms of proof. If the proof is not forthcoming, no matter how long the alleged dependant has been covered, they are removed effective January 1, 2004. It is estimated that this will save 1.2 million dollars per year, conservatively. Do any of you guys require the same? Were there overwhelming objections when you rolled this requirement out?

cthr · July 2003

Don,

The only time we require proof is if an existing employee marries and wants to add a spouse. I would think that this would be an administrative nightmare for you. Do you have a lot of employees who are claiming dependents who aren't really dependents?

Don D · July 2003

That's apparently the suspicion at the corporate level. An insurance seminar I attended a few weeks ago provided information that showed roughly a million already saved by a pilot of this. The fact is that we have no way of knowing. We enroll whoever is listed on the new-hire and nothing ever gets questioned until they reach age rolloff time. We are looking at every possible way to cut costs and this is a new approach to me. But, if it works, great. It means my premiums don't go up quite as much.

njjel · July 2003

We have no such requirement and I would think this would NOT be good for company morale. But then if they beleive they will save big bucks, they may not give a hoot about morale. A softer position would be for them to require proof of dependency going forward.

System · March 2004

Don,
I found this post when I did a search. I was curious - did you require and receive documents proving dependent eligibility? This is something our company has simply got to do - we have common law spouses and ineligible children on our insurance that are costing us a lot of money. Can you give me some advice on what to require and how to get this started? I think management is going to be somewhat resistant - the owner is very tender-hearted and wants everyone insured. Unfortunately, our medical costs (we're self insured) are astronomical. If you have a letter you sent advising everyone of this requirement, that would be very helpful. Thank you!

njjel · March 2004

Would the owner support what you wish to do? It doesn't sound so. If you do go with a change, i would advise you give them plenty of notice OR as I advised above, make it a "going forward you will require, etc."

System · March 2004

It's hard to say if the owner would support this. I think he would if other managers supported it, and if I can show him accurate proposed savings amounts. I definitely think we should require this from all new hires, but there's a ton of money being spent on ineligible dependents that could be better spent elsewhere.

Don D · March 2004

Linda: We started requiring proof of marriage and dependancy verified by either court order or marriage licence or birth certificate, of all new employees. Effective January 1, 2004, beginning of new plan year, anyone who wanted dependants covered had already had a three month period of time to satisfy the proof requirements by bringing documents to HR. The HRIS system had automatic 'no' flags on all dependants already in the system. Unless HR changed it to 'yes', meaning verified, they had no coverage. There was mumbling and grumbling but eventually every employee complied. Our corporation estimated that it would save over a million dollars a year and that money can be put to better use including profit sharing. If an employee's spouse has a baby now, the employee must bring proof of birth. We will accept a footprint until the card is issued. No exceptions, nationwide, 200 locations.

Note: The preceeding is my personal opinion and has no value beyond that. Although it may be 'sorta offensive' or 'indeed offensive' to someone out there, it is offered without regard to that possibility. Should you find yourself alarmed by my post, you may privately mail me to protest or you may alert the principal's office. x:-)

Don D · March 2004

Just to emphasize; this is not only for new employees. Every current employee also had to re-enroll last November for CY Plan Year 04. That's 100% of all employees.

Note: The preceeding is my personal opinion and has no value beyond that. Although it may be 'sorta offensive' or 'indeed offensive' to someone out there, it is offered without regard to that possibility. Should you find yourself alarmed by my post, you may privately mail me to protest or you may alert the principal's office. x:-)

Hunter1 · April 2004

Don:
What was your experience? At least at your local plant, did you disqualify one or a hundred? One percent?

cebudragonlady · April 2004

Don~
If as you say, "every employee complied" - would that mean no dependent was disqualified ? And if no dependent was disqualified, what did you save ?

Chari

Don D · April 2004

Every employee complied by going through the re-enrollment process. Quite a few previously claimed dependants were no longer claimed. I would estimate 25 or so, minimum. Employee explanations ranged from, 'she dropped out of school' to 'that baby's with his momma now' to 'We're divorced' to 'She ain't with me no more'. One guy could not produce a birth certificate for a son he claimed existed who had been covered and filing claims for two years. To me, this all equals savings, if only by getting claim filers off the policy, whether they were at one time legitimate or not.

Janet · April 2004

There was an article in the Wall Street Journal about this last week--might have been Wednesday. Apparently some larger companies has saved substantial sums, although the results are more mixed for smaller companies.

System · April 2004

Well, I've hit a brick wall here. Management doesn't like the idea of removing ineligible people from our insurance. This after our president told me to remove my son because he was not living with me, although I have joint custody! I'm venting, I guess, but I get frustrated when a good idea gets shelved for no good reason. If any of you do pursue an audit of your insurance participants, please let us know how it turns out. I plan to bring this up when our company's annual financial breakdown comes in from our insurance carrier. Wish me luck!

Don D · April 2004

I didn't realize that a dependant child had to live in the immediate household to be covered in most plans. I think I would have challenged him on that one if I had custody or joint custody.

System · April 2004

Yeah, Don, I would have challenged it, but life is just too short, and I pick my battles more carefully now. I didn't remove Robbie from the plan until his dad's insurance took over, but it's the principle of the thing. Thanks very much for what you mailed me. We're self insured and spending a fortune on these claims, and it's money that could go elsewhere...like a raise for me!

E Wart · April 2004

Linda, I would think this would be controlled according to your SPD. (Such as ours say that the employees children up to 19 (25 if full time student) can be covered (doesn't matter whether live with them or not.) The spouse's child, must live with them, have custody, to be covered. You might want to check your SPD. As much as I think it is rotten that your President told you this (sort of picky in my opinion), I would think that if you change your plan, you should certainly follow the 'rules" whatever they are.
E Wart

Proof of Dependancy Required

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