Meijer Presentation Final

  • 457 views
Uploaded on

Final presentation for my Compensation Internship at Meijer-Summer 2010

Final presentation for my Compensation Internship at Meijer-Summer 2010

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
457
On Slideshare
0
From Embeds
0
Number of Embeds
1

Actions

Shares
Downloads
7
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide
  • I am Louis Lawson, and as an intern in the Total Rewards department, I worked on the Dependent Eligibility Verification Audit.
  • Today I will be discussing the reason for the audit, the process of the audit, and the solution put in place to avoid a company dependent eligibility audit in the future.
  • Over the past five years, Meijer has seen a steady increase in health care cost This graph shows that Meijer’s budget for health care per employee per year has increased year on year for the past five years at an average of 5.7%. There appears to be no end in sight, according to a recent report from PriceWaterhouseCoopers health care cost are expected to increase by 9% in 2011. With this being the case, it is ideal for Meijer to take all possible measures to mitigate health care spending, According to the publication HR Management: Given the rise in healthcare costs, and practically every option to curb healthcare spending exhausted,Many companies are now turning to dependent eligibility audits to effectively qualify the benefits they provide to their employees and their dependents.
  • A dependent eligibility audit is a highly structured systematic, independent, and documented process for obtaining evidence. Subscribers who claim dependents on their health plans are required to submitofficial record(s) that prove each dependent is eligible under the criteria defined by Meijer’s health plan.This is a controlled process designed to preserve the integrity of an employer’s benefit plan by identifying incorrectly enrolled participants. Incorrectly enrolled and ineligible dependents can result in significant and unnecesary cost to the plan sponsor and participants, as well as, create compliance/fiduciary violations on the part of the employer. An audit helps to lower cost and mitigate compliance/fiduciary violations such as ERISA Fiduciary duty (only pay benefits to eligible team members and dependents) and sarbanes-oxley (strenghten internal financial controls and reporting) by confirming the eligibility of each dependent on an employer’s plan.
  • A DEVA’s success is based on two factors:The percentage of team members who verify the eligibility of their dependents, thus confirming their compliance with Meijer’s health plan requirements. The percentage of dependents that are unable and unwilling to verify their eligibility and are required to forfeit coverage through Meijer, translating to lower health care cost for Meijer.
  • I have discussed the need for companies to perform an audit in general, but why exactly did meijer decide to implement one?For the past six years, like most companies, Meijer has not required their team members to provide proof that their dependents are eligible for coverage. Given the rising cost of health care over the past five years and health care expansion, a dependent eligibility verification audit provides a two- fold solution to meijer:Allows the employer to ensure that all dependents are eligible and in full compliance with Meijer’s plan requirementsIt provides a forum where ineligible dependents can be taken off the employer’s plan lowering overall costs
  • Through working on Meijer’s dependent eligibility verification audit I have concluded that :Meijer’s use of an audit has not only enabled them to ensure that current team members comply with health plan requirements but also has allowed Meijer to develop a process that allows them to avoid future large scaled eligibility audits through the practice of requiring documentation for each dependent added to a team member’s coverage.
  • Now that we know why Meijer decided to do a Dependent audit, lets discuss the actual process of the audit.
  • After an extensive Request for Proposal Process, where several vendors vied for meijer’s business. We decided upon Mercer, a leading Human Resources consulting firm, who specializes in dependent eligibility verification audits. One of their selling points, was their ability to adapt to Meijer’s requirements. Time constraints were one of the biggest challenges that Meijer faced during the audit. Given the timeframe and desire to complete the audit before open enrollment, We at Meijer required a timeline of 16 weeks total and only 8 weeks for employee verification. Typically an audit is 24 weeks with a verification period of 16 weeks. Mercer was so tasked with verifying the eligibility of our team members’ 18,175 dependents in 16 weeks.
  • The most important part of an eligibility audit is the communication process, our strategy was to provide our team members with as much notice and information as possible. This began with targeted letters that preceded their audit package.These letters were segmented into two groups.Team members with and without dependentsTeam members with dependents were informed of the upcoming audit, Meijer’s partnership with Mercer, and Meijer’s decision to become an early adopter of the expanded eligibility to age 26 courtesy of the Patient Protection and Affordable Care Act.Letters to team members without dependents were distributed in order to make them aware of the expanded eligibility,in the event that they had dependents that were newly eligible because of the PPACA. As an early adopter, we allowed team members to add their newly eligible dependents starting mid June through July 30th. In addition to developing targeted letters, myself and Colleen worked with Mercer to modify their verification packet. During this task, I drew upon my experience as a customer service rep on an audit for the State of New York, working along with the DEVA team we were able to meijerize and modify the documents sent by Mercer in order to mitigate confusion and expedite cooperation.Upon beginning the audit, a decision was made to reinforce the communication sent via mail with articles posted in the company newsletter. Our decision was to increase the urgency of these messages as the deadline approached.
  • A great deal of time was placed on the initial communications to help expedite cooperation during the document verification process. As seen above, the process is quite simple. The team member received a packet with instructions on what to provide to prove their dependents eligibility. Compliance with those instructions resulted in a completion notification. If documents were not sufficient, the team member would receive an incomplete notification, and if they did not respond they would receive a non responder notification. Beyond explicit instructions. A call center staffed by Mercer in Toronto, has been available to clarify any issues for our team members. Once the documents are sent in and complete. An auditor determines whether a dependent is confirmed as eligible or ineligible for coverage. If the documents prove eligibility, a complete status letter is issued and the dependent is confirmed eligible If the documents do not prove eligibility, the dependent is currently ineligible and an incomplete status letter is issued.The audit process also allows team members to voluntarily remove ineligible dependents. A team member is able to submit documentation up to August 17th to prove their dependents eligibility. If proof is not submitted by this date, the team member’s dependents will be dropped.
  • Even with explicit instructions and a trained customer service staff, there are always unanticipated scenarios. As the intern for this project, I was responsible for handling issues that were escalated pass the csr and escalation manager at Mercer. Some of which included accommodating individuals that had not filed their taxes yet. I made the decision, based upon my experience that the 2008 tax return along with the 2009 tax extension would be acceptable proof as one example. Another example is the Affidavit of parentage, we received a string of 9 team members submitting this document, after doing research on the legitimacy of this document and consulting Mark Henderson at Mercer, we made the decision to accept this document as proof of relationship for child dependents.
  • Upon receipt of documents from team members, the results are posted onto our DEVA site.This site provides real time reporting and access to a spreadsheet for each metric being recorded. I have converted the data on this page into a pie graph for clarity. This pie graph provides a breakdown of our 9,803 team member’s status, whether they have completed the process, are in process, incomplete, or have not started at all. At this point there are 82.8% that have completed the process.
  • Once the process is complete the team member’s dependents are determined eligible or ineligible. This page provides real time reporting of the status of our team member’s 18,174dependents. As you can see _83.2%__ of our dependents are eligible and .3% are in progress While 2.5% of our dependents are currently ineligible because they have been removed or have failed verification. 14% to date have not provided documentation. These three groups represent the cost savings of an eligibility audit.
  • Before health-care overhaul legislation passed, Mercer estimated that between 3% and 8% of covered family members wouldn’t be able to back up that claimed relationship with proof.The ppaca act effected the age limitation of dependents, according to HRAdvance (now with Hewitt and Associates)President Craig Firestone,Children age 19 and older make up approximately one-third of the total ineligible dependents in our current eligibility audits, he estimates that the number of ineligible overage dependents will be reduced from 3.3 percent of the total population to an average of 1.5 percent, based on student status now being irrelevant,Overall, Firestone expects that the number of ineligible dependents will drop by about 4 to 5 percent compared to pre-reform levels.Meijer began planning for this audit prior to the law change, needless to say, the cost savings projections that were anticipated have been reduced.According to Mercer, the average cost of an ineligible dependent is $2100, in order to determine the savings that come from removing an ineligible dependent one simply has to multiply the amount of ineligible dependents by $2100.To date, ____dependents have been removed from this verification, roughly___%, this translates to an annual savings of $____ and five year savings of $____.This amount does not include the ___ who have not provided documents, this ___accounts for roughly ____ dependents, upon August 17th, the percentage that has not provided documents must also be included in the cost savings calculations. We project that the annual savings will be higher because of this.
  • We know why the audit was done, and how it was done, what are we doing here at Meijer to avoid implementing another audit of this scale.
  • Moving forward, Meijer wishes to avoid such global dependent audits as the one currently underway. In order to do so, the shared services team developed a process that requires team members to provide proof of their dependent enrollees within sixty days. Team Members will receive a notice at the midpoint, enrollees will be dropped if proof is not submitted. I worked directly with the file team to develop a process for uploading that proof into Meijer’s system.
  • The above flow chart diagrams the process of receiving proof. This process has been piloted for the HCR process, which is Meijer’s early adopter of the PPACA expanded eligibility initiative. Proof is received, if it is invalid it is distributed to HRSS CSRs in order to follow up with the team member to acquire valid proof. If the proof is valid, it is given to the file team, who logs this information into the PeopleSoft system, based upon the process myself and Dave Webber in shared services developed. This process will be used during open enrollment for new enrollees and people dropped from coverage due to their inability to provide proof of eligibility.
  • Meijer’s decision to be an early adopter of the PPACA has generated 508 Dependents, the team member who enrolled this dependent is given the sixty days to provide proof. If proof is not provided by that time, the dependent is terminated from coverage. To date 340 dependents have been officially added to coverage based upon accurate proof provided subsequent to their enrollment. 168 are still pending (including the 21 responses with inaccurate proof) accurate documentation to verify eligibility.
  • Given increasing Health Care cost and expanded eligibility of dependents through health care reform and the patient protection and affordable care act in particular, this process ensures that Meijer will offer health care to only those who have proven their eligibility, thus avoiding another company-wide dependent eligibility audit in the future.

Transcript

  • 1. Dependent Eligibility Verification Audit
    Louis Lawson
    1
  • 2. Today I will discuss
    2
    The Reasons
    The Process
    The Solution
  • 3. Rising Healthcare Costs
    3
    Hewitt Associates, comp. Meijer and Hewitt: Partnering for Success-Appendix-Historical Healthcare Costs and Trends. Rep. Hewitt Associates, 2010. Print.
    Hobson, Katherine. "Is Your Spouse Really Your Spouse? A Dependent Audit Wants to Know - Health Blog - WSJ." WSJ Blogs - WSJ. June-July 2010. Web. 29 July 2010.
    Fuller, Thomas J. "RealLife HR Recommends Cost-Savings Tool: Dependent Eligibility Audit - Benefits & Compensation - HR Management US | GDS Publishing." HR Management | The Online Human Resources News Source HR Management | The Online Human Resources News Source | GDS Publishing. Web. 03 Aug. 2010. <http://www.hrmreport.com/article/RealLife-HR-Recommends-Cost-Savings-Tool-Dependent-Eligibility-Audit/>.
  • 4. Dependent Eligibility Audit?
    Highly Structured
    Controlled Process
    Helps lower health care spending
    Mitigates Compliance/Fiduciary violations
    4
    HRAdvance - Benchmarking Case Studies." HRAdvance's Plan-Smart: The Standard in Eligibility Solutions. Web. 28 July 2010. <http://www.plan-smart.com/ppt/dea_results_stats.html>.
  • 5. The success of this project was measured by:
    5
  • 6. Reasons for the Dependent Eligibility Verification Audit:
    6
    Rising cost
    HealthCare Expansion
    Audit presents a two-fold solution
    Confirm Eligible Dependents
    RemoveIneligible dependents
  • 7. 7
    Executive Summary
    Meijer’s use of a dependent eligibility verification audit has enabled them to:
    Ensure that current team members comply with health plan eligibility requirements.
    Develop a process that allows them to avoid future large scale eligibility audits.
  • 8. 8
    The Reasons
    The Process
  • 9. 9
  • 10. Strategy
    Communication Process
    10
  • 11. Document Verification Process
    11
  • 12. Escalated Issues
    12
  • 13. 13
  • 14. 14
  • 15. Cost Savings
    15
    * Estimate, subject to change by audit’s conclusion.
    Hobson, Katherine. "Is Your Spouse Really Your Spouse? A Dependent Audit Wants to Know - Health Blog - WSJ." WSJ Blogs - WSJ. June-July 2010. Web. 29 July 2010.
    "Dependent Eligibility Audits Impacted by Reform Law." SHRM Online - Society for Human Resource Management. Web. 02 Aug. 2010.
  • 16. 16
    The Reasons
    The Process
    The Solution
  • 17. Moving Forward
    17
  • 18. Dependent Verification
    18
  • 19. HCR Results
    19
    As of July 26th
    508 Dependents added
    340 have provided accurate proof
    21 have provided inaccurate proof
  • 20. With this process in place….
    Meijer is able to ensure that their records remain accurate, avoiding the need to “clean house” with another large scale dependent eligibility verification audit in the future.
    20
  • 21. Thank You
    Any Questions?
    21