About 1% of the dependents on a 2023 university medical, dental or vision plan were found to be ineligible during the verification process that began last March and concluded after the November benefits open enrollment. The ineligible dependents included 44 spouses/domestic partners and 54 children, a small subset of the 8,709 insured dependents at the beginning of the project.
Benefits director Ed Holland, university human resources, said the verification process showed that the ISU Plan wasn't overloaded with benefits recipients who shouldn't have been there.
"For the most part, there were steps in place to mitigate the potential for a significant volume of ineligible dependents," he said.
Regardless of the outcome, Holland said the review was worthwhile for the university to complete to ensure the plan wasn't bearing a lot of unnecessary expenses.
The dependent eligibility verification (DEV) project was part of a set of February 2022 recommendations following a state Board of Regents internal audit of university benefits. Others included requiring documentation for dependents and updating processes and procedures when employees change their insurance coverage.
"That might be the most significant outcome," Holland said. "The dependent eligibility verification brings us to a clean baseline, but it wouldn't matter without some of these other checks we've put in place, like requiring documentation for dependents at hire time and during open enrollment.
"With them, the likelihood of ineligible dependents in the future really diminishes," he said.
Outcomes: Dependent eligibility verification
|
Population |
Headcount |
Percentage of dependents |
|
Covered dependents for plan year 2023 |
8,709 |
100% |
|
Reason for ineligibility |
|
|
|
Documentation confirmed ineligibility |
75 |
|
|
Incomplete documentation |
30 |
|
|
No response |
65 |
|
|
Ineligible dependents |
170 |
1.95% |
|
Aged out of eligibility at end of 2023 plan year |
-28 |
|
|
Added back during November open enrollment with proper documentation |
-44 |
|
|
Final ineligible dependents |
98 |
1.12% |
Audit highlights
The 2022 regents' audit highlighted the return on investment for a DEV at seven other universities, six within the geographic region and one regent institution. The cost to complete those projects ranged from $136,000 to $389,000 and resulted in savings estimates that ranged from $1 million to $4 million. The cost of Iowa State's DEV was $137,000.
The estimated savings to Iowa State -- really, costs avoided based on the assumption that the ineligible dependents no longer are on the plan -- is $447,364. By comparison, Iowa State paid out about $90 million in health care claims in 2022 (employees' monthly premiums covered less than 10% of those costs).
The verification process
From March 27 to June 2 last year, 3,747 employees with at least one dependent on their plan were asked to submit documents -- such as birth certificates, marriage licenses and proof of residence in the same household -- to prove eligibility for insurance coverage. Ineligible dependents, including those for whom no documents were received, were removed from Iowa State's benefits records prior to the annual open enrollment window in November. Employees had the opportunity during open enrollment to add dependents back in by submitting the appropriate documentation. In fact, 44 dependents regained coverage for 2024 this way.
