Time for a Spousal Spending Checkup?

It’d be nice to write that health care doesn’t have to cost an arm and a leg. In this case, that cliché likely is both inappropriate and overly optimistic.

But two experienced health plan administrators suggest in the May Benefits Magazine that plan sponsors can take some relatively simple and inexpensive steps to control spending. In “A Baker’s Dozen of Practical Ways to Reduce Medical Claims Costs,” Daniel W. Ryan, CEBS, and Ryan T. Stephens single out 13 actions worth considering.

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Four of the tips narrowed in on spousal coverage costs. For example, Ryan, a retired UFCW administrator in Illinois, and Stephens, part owner of a third-party administrator in Oregon, suggest three health cost savings actions that involve spouses—and one that involves ex-spouses. (Within the past two weeks, three different health plan sponsors have told me that spouses are costing their plans more than the employees themselves.)

[Related: The Effects of ACA on Medical Expense Accounts (HSAs, FSAs and HRAs)]

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  1. Some plans still aren’t doing dependent eligibility audits. Stephens had several clients identify fraudulent claimants. And Ryan reported that while his UFCW Midwest Plan didn’t save a lot of money on claims by doing such an audit, the fund cut its Affordable Care Act transition reinsurance premium by purging inactive dependent names from its rolls.
  2. A plan can pursue coordination-of-benefits (COB) savings on prescription drugs. If a plan knows or learns that a spouse has drug benefits from another source, the plan’s PBM can block processing drug benefits for that person and let the pharmacy know it should file a claim with the primary plan or insurer. Later, the dependent can submit a claim for any copayment for processing as a secondary benefit.
  3. Plans can use the “working spouse” rule, which has a goal of driving a spouse to his or her own employer’s health plan. Plans can require that a spouse elect employer-sponsored coverage if it’s available at his or her workplace. Otherwise, benefits will be paid at a reduced amount. Ryan’s UFCW plan gradually put in place a working spouse rule as union contracts expired from 2006 to 2011. By 2013, the UFCW Midwest Plan achieved $3.6 million in annual “other insurance” savings.
  4. Divorce checks through public records that are online—a good task for a summer temp or receptionist—can turn up a divorce that may make a spouse ineligible for coverage under an employee’s plan. The authors suggest the plan follow up with a “gentle letter” to the employee—The plan may be wrong, or the couple may have remarried. If a couple really has divorced, the plan can terminate coverage on the ex-spouse and may want to try to recover overpaid claims

Ryan and Stephens offer nine additional cost-savings tips in the article. Some of the others are a bit more complicated, but some are even simpler. All save the plan money, and at least one—a narcotic pain management program—can also save the health of the participant.

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Chris Vogel, CEBS
Senior Editor—Publications at the International Foundation

 

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