From the March 2010 issue of Ceridian Connection.

Ceridian research shows American companies lose an estimated $22 billion annually paying for the health care of their employees' ineligible dependents Companies looking for a fast, reliable way to cut the rising cost of providing health care for employees now have another option: an expanded version of Ceridian's dependent verification services.

Employee Benefit Adviser, your online and on-demand site for everything about the business of benefits, provides this podcast from a recent interview with Ceridian Benefits Services' Jon Attwooll, who explains what's at stake when health plans cover dependents who are not actually eligible for coverage, and how a dependent eligibility audit is conducted.

"The cost of health care continues to be a top concern among employers," said Jon Attwooll, manager of Ceridian Verification Services. "A dependent eligibility audit is one of the fastest, most effective ways for employers to reduce their total health care costs as well as future costs."

Ceridian expanded its verification services to make it easier for employees to submit proof of their dependent's eligibility and to give employers greater transparency into the health care savings identified by the audit. Click here for more information.

For more than a decade Ceridian has offered dependent audits, in which companies request proof that employees' dependents, such as spouses and children, qualify for medical benefits. However, the spiraling cost of health care, combined with employers' increased focus on expense management, has increased demand for this service as a proven cost-containment strategy, Attwooll said.

American companies lose an estimated $22 billion annually paying for the health care of their employees' ineligible dependents, according to Ceridian. On top of that, employers are now finding that factors such as high divorce rates and blended families are leading to even higher numbers ineligible dependents, Attwooll said.

"Our research shows that up to 15 percent of employees' dependents receiving employer-provided medical benefits aren't eligible to receive them," he said.

By removing just one ineligible dependent from its health care plan an employer can save about $3,000, Attwooll said, regardless whether the plan is fully insured or self-insured.

"The savings that result from dependent audits are immediate and often staggering, ranging from tens of thousands to hundreds of thousands of dollars, even millions, depending on company size."

Not only are dependent audits a way to curb the runaway costs of health coverage, Attwooll said, but they also provide a way for employers to ensure that their benefit plans are administered consistently and fairly to all employees.