Documentation for Covered Dependents
In an effort to control costs, the Public Employee Benefits Authority (PEBA) will begin auditing subscribers who cover dependents to ensure that only eligible dependents have coverage through PEBA. Dependent eligibility verifications audits have been used by Fortune 500 companies for more than a decade.
According to most experts, 4 to 8 percent of dependents covered under an employer-sponsored plan are ineligible for coverage. These dependents are often divorced spouses, grandchildren or other family members who are not eligible for benefits. About 187,000 dependents have health coverage through PEBA. Based on these estimates, 7,500 to 15,000 may not be eligible for this coverage.
In 2009, the average cost per dependent under the State Health Plan was more than $2,600. If only 4 percent of covered dependents turn out to be ineligible, conducting this audit will save our self-insured plan more than $19 million a year.
There are two separate parts to the audit process:
1. The initial audit cycle is expected to take 18 to 24 months to complete. At some point during the audit cycle, all current subscribers who cover dependents will receive a letter from PEBA asking them to submit documentation to verify the eligibility of each of their covered dependents. If the subscriber does not provide documentation within 60 days of the audit request, his dependent will be dropped from coverage. Because this is not considered a qualifying event under COBRA, the dependent would not be eligible to continue their coverage and would have to wait to enroll in coverage based on a special event or during open enrollment (October every year, effective January 1 of the following year).
2. Beginning May 2, 2011, PEBA will also require documentation at the time of enrollment for dependents of new hires and dependents added during open enrollment or due to a special eligibility situation. Documentation must be received and approved by PEBA before any of the benefits selected will become effective.
For more information about the audit, you can visit the PEBA website or review our Frequently Asked Questions (FAQ).
You may also voluntarily submit the required documentation for your dependents.
Please print the Self Audit form and send to PEBA. Do not send this form to HR.
If you have any questions or concerns, please contact PEBA at 888-260-9430.
Frequently Asked Questions