General Motors is auditing employee health benefit eligibility in effort to lower their costs

Reuters summarized a Wall Street Journal report on GM's health benefit eligibility initiative August 13th as follows:

"General Motors Corp looking to trim its nearly $5 billion-a-year health-care tab, is cracking down on workers who are collecting medical benefits for ineligible dependents, the Wall Street Journal said Wednesday.

 

GM is giving its 67,000 hourly workers until Aug 20 to voluntarily remove ineligible dependents from their health policies, after which, they would have to prove the eligibility of covered-family members through an official document, the paper said.

 

If GM finds out it paid for health expenses it should not have, workers may be forced to reimburse the company, the paper said, citing a GM spokeswoman.

 

The No. 1 U.S. automaker has audited its health-care rolls before, but the new effort is more extensive than those of previous years, the paper said, citing the company spokeswoman. GM did not immediately return a call seeking comment."

A separate issue- policy-wise- in an era where the roll of uninsured continues to expand, is why aren't there any federal standards for eligible dependent definitions that might help reduce confusion and protect some classes of dependents for coverage (federal standards are needed due to ERISA exemptions for so many employers from state mandates in this regard.)

Another separate policy/legal issue is: health plans have been in a conundrum over terminating coverage retroactively based on auditing eligibility information (several California health plans received major state regulatory fines for recessions, and states have moved to enforce or legislate tighter standards regarding recessions.) So if an employer basically does the same thing, will health plans contracting with the employer to provide coverage face regulatory liability for their actions? Will employers only attempt such strategies for their self-insured covered employees, where the ERISA exemption from state oversight is even clearer then when employers contract with state regulated health plans?

Ignoring these policy and legal issues, why is it so difficult in this day and age for many employers, and ultimately health plans, to maintain accurate eligibility information?

Is it because the policies and procedures for some employers' dependent eligibility are too complicated, or too vague? Is it because some employers have too paper-bound of systems regarding eligibility processing and maintenance? Is it because some employers’ communications with employees don't make eligibility standards clear enough? Do some employers not provide convenient and accessible means for employees to report dependent eligibility information? Are some employers working with eligibility systems that lack adequate reporting, maintenance, flags, and processing features?

The answer to all of these somewhat rhetorical questions, in the case of some employers, is ‘yes’. While some employees undoubtedly intentionally abuse dependent eligibility standards, there are other employees who have clue that their currently enrolled dependents shouldn't be eligible, according to their employer's criteria. Sometimes this can be attributed to employee ignorance, other times it can be attributed to employers not adequately addressing the above issues.

Health Plans have standards for dependent coverage eligibility that are imposed upon small and mid-size employers, but larger employers often look for plans to customize their eligibility requirements to fit the employer’s own standards. This means plans can end up applying different sets of rules-based eligibility criteria, which can adds to the complexity of the situation.

In order to further simplify health care, simplifying and further standardizing dependent eligibility requirements, and how they are communicated, processed and reported in the employer environment, would certainly be a good step forward.