Mercer Urges Employers to Use Dependent Eligibility Audits

July 13, 2010 ( - In preparation for the January 1, 2011 expansion of health care coverage to children up to age 26, Mercer is urging plan sponsors to review their current health plan for cost-saving opportunities.

The company, which provides dependent eligibility audit services, estimates the influx of newly eligible dependents will on average increase total health care costs from 0.25% to 2%.Mercer says it is important for plan sponsors to begin 2011 from the lowest cost base possible, which can be achieved in part by conducting a dependent eligibility audit before the end of the year.  

“We believe that, even without dependent eligibility expansion, dependent audits just make good business sense,” said Rich VanThournout, Health and Benefits Business Leader for Mercer’s US Outsourcing business, in a news release. “Not only do they almost always lower total plan costs, they also give plan sponsors some much needed clarity as to the demographics of their participant community, which empowers both sound cost forecasts and strategic plan design.”  

Prior to the passage of health care reform, Mercer conservatively estimated that 3% to 8% of covered family members (spouses and dependents) could not produce valid verification of eligibility during an audit. The news release said employers pay an average of $2,100 annually to cover a single dependent, according to an estimate based on data from Mercer’s National Survey of Employer-Sponsored Health Plans.  

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