ppt - GFOAz

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
◦ Consistently adhere to the contract
◦ 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
 Ex-spouses (divorce never reported to HR)
 Ex-stepchildren
 Loss of student status
 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
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
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!