Benefit Cost Management Lupe Sierra Deputy HR Director Benefit Cost Management Insure the integrity of the plan. ◦ Understand the contract provisions. Make sure your benefits staff understands them too. ◦ Consistently adhere to the contract provisions. ◦ Provide accurate plan administration Eligibility requirements Timely processing of enrollment changes The Impact of Enforcing Eligibility Requirements Eligibility verification audit results ◦ $2100 average annual cost of each dependent on medical plan ◦ 319 ineligible dependents were removed due to failure to meet contract definition of eligible dependent Ex-spouses (divorce never reported to HR) Ex-stepchildren Loss of student status ◦ ROI Cost of audit $30,000 Savings for removing ineligible dependents $669,000 Savings for this year and possibly multiple future years Contract Provisions & Their Impact What you get for the premium paid. ◦ ◦ ◦ ◦ ◦ ◦ ◦ Provider discounts Network Costs for booklets, ID cards etc. Performance guarantees Technical & administrative capabilities Premium payment arrangements Banking arrangements Best Cost Containment Tools Spend the money for qualified consultants. Review your utilization reports to see how plans are being used or abused. Stay current with trends, legislation. Anticipate and prepare for change. Hire a benefits administrator that really enjoys the job!