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HEALTHCARE

EMPLOYER-SPONSORED HEALTH CARE PLANS Dependent Verification Review Project – Who Does It Protect? By MARK HELTON

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ependent eligibility reviews are often thought of as a way to reduce employer cost for health care plans, but there are other reasons to engage in such a process. These reasons include, for example, the legal and financial issues employees may face from enrolling ineligible individuals on an employer group health care plan. You may be protecting your clients – employers and employees – from future hazards by ensuring everyone is aware of the rules. Regardless of whether there was an intent to defraud or the employee just does not fully understand the eligibility rules, the time to correct the error is not when the dependent has a major health issue and claim. 32 | CALIFORNIA BROKER

THE POTENTIAL THREATS OF INELIGIBLE EMPLOYEES Employees sometimes misunderstand the rules of eligibility. For example, they may allow a former spouse or former stepchildren to remain on coverage following a divorce. It may be even that a court orders an employee to maintain coverage on a former spouse and/or stepchildren for a given period of time. Some employees don’t understand that this order only obligates the employee to pay for coverage and is not a court order for the employer to maintain coverage for the employee’s former family members. With a few exceptions (such as for fully insured plans in Massachusetts), employees can’t keep former family members on - CalBrokerMag.com -

employer-sponsored healthcare plans, but if ordered by a court to supply insurance they may opt to pay the full rate for COBRA or move the former family member to a private plan on the open market. To be clear, the true danger for an employee who enrolls former family members may not only be committing insurance fraud, but they may also be in violation of the court order that demands they maintain the coverage. The employee may be saddled with paying all health care costs for a former family member if the insurance claim is refused. Often ineligibility may go unnoticed until there is a major claim, which of course is then too late. The employer may also request repayJULY 20177

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