2009. 5-12
Joint Health Care Committee Notes from the Special Meeting on Dependent Audits
10:00 – 12:00 p.m. via video
Anchorage: GHH 103
Fairbanks: Butrovich Bldg. Sherman Carter Conference Room
Juneau: Egan 115
Purpose of Meeting: This was a special meeting to hear Robert Lambert-Lee from ADP
National Account Services present an outsourced dependent audit proposal.
Present
Union: Colin Clausson, 6070; Tim Powers, UAFT: Jennifer Madsen (6070 Alternate); Jay
Sowell, 6070
Management: Beth Behner, Stuart Roberts, Yvonne Boyce, Heather Swanson, Lisa Sporleder
(Alternate), Wendy Tisland
Staff: Mike Humphrey, Director of Benefits; Erika Van Flein, Benefits Administrator
Staff: Cyndee West, UNAC Contract Administrator; Jane Reilly
Guests: Michele Pope; Vickie Gilligan; Robert Lambert-Lee, ADP; Ty Arlind, ADP, on
teleconference
Absent
Union: John O. Riley (UNAC), Tim Hinterberger (UNAC alternate), Jacob Joseph (UNAC),
Jane Weber (UAFT alternate)
Introductions were made at all locations. Robert Lambert-Lee introduced himself and Ty Arlin.
Closely following the provided powerpoint, he explained what a dependent audit is, and what the
university could gain from having one done. Mr. Lambert-Lee stated that the current average
rate of ineligible dependents found by ADP is 8.8%. He clarified early questions which arose,
including that the audit would not include retired employees’ dependents, all documentation
would be destroyed at their facility after electronic storage and their solution center or call center
would answer the more simple questions employees may have. More complicated questions
would be directed to UA with ADP also contacting UA on the item. All phone conversations
would be recorded. ADP follows and recommends standard and best practices for the industry
but will tailor the questions and documentation to the University’s specifications.
Mr. Lambert-Lee described several types of audits his company can perform. There was
discussion on the current policy that BCBS follows regarding dependents between the ages of
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19-24 and he noted that this service could be continued by BCBS and ADP would work around
it.
There was discussion on whether ongoing compliance on new hire, open enrollment or life
change events could be implemented through HR with similar documentation as this audit will
require. This would reduce the need for later or outsourced audit services. Mr. Lambert-Lee
noted this “gatekeeper” service is a nominal cost and is rated per employee (with dependent),
cost at enrollment.
Mr. Lambert-Lee reviewed the process the audit would follow: initial letter, reminder letter,
pass/fail letter resubmit/partial complete letter and a concurrent call line for employee questions.
There was discussion on what constitutes documentation and Mr. Lambert-Lee said this would
be determined at UA’s discretion with ADP’s recommendations. The question was posed about
documents provided in foreign languages as well as how ADP can determine the authenticity of
submitted documentation. Mr. Lambert-Lee will research ADP’s procedures with foreign
documentation and they have attorneys who can aid in the determination of authenticity.
Audit status is available on-line at anytime to the University. At the end of the audit, after
tracking and recording all correspondence, the University is given the results including who
failed and why. There is a “silent grace period” which gives UA a chance to review the results
and make any adjustments; this time frame is at the discretion of UA. The University is solely
responsible for dropping any ineligible dependents. The question was raised as to the number of
dependents that were incorrectly identified as ineligible by ADP. ADP will have to find out
what their error ratio is.
A rough proposal of potential savings was presented, but the underlying data was incorrect so the
example was incorrect. Mr. Lambert-Lee can provide a more accurate proposal with more
accurate figures on number of employees with dependents and actual premium charges.
ADP offers two alternatives for remuneration. There is an implementation charge of $7500. The
remainder of the charge can be either a percentage of the amount recovered, or a flat rate per
employee (with dependent) of approximately $15 to $20.
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