Mistakes can be common, especially when it comes to health insurance claims. Because many organizations are often understaffed, clerical and data entry errors can end up adding significant cost to a company’s bottom line.
According to an article appearing on the Employee Benefits Advisor website, those same organizations can get some of this money back through regular maintenance of benefits records.
Financial planners have said that benefits coverage mistakes are often found to occur in Flexible Spending Accounts (FSA’s), however, fully-insured coverage and self-insured coverage plans can also end up costing organizations more. One such example was a school system in the Rust Belt. A healthcare benefit audit performed found $800,000 in unnecessary healthcare claim spending. A follow-up audit performed just three years later found $500,000 in similar unnecessary expenditures.
Ideally, companies would do well to perform such audits every three years in order to be most effective overall. Curtis Cannon, managing partner at Axis Recovery advises that workers sometimes aren’t aware of what or even who is covered under employer healthcare plans. Cannon estimates that approximately 3% of dependents don’t qualify for coverage.
Some companies are hesitant to perform a healthcare benefits audit for fear of potentially alienating their workers. Cannon says that hiring an external, third party can help employees feel less like they are being targeted. Also, by using the word ‘verification’ instead of the word ‘audit’, it can make workers feel more at ease.