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 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    

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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!