Dependent Audit Questions & Answers

8/23/2006

Employees with dependents enrolled in one of the ABX health insurance plans by now should have received letters from Mercer Administration regarding the ABX Dependent Audit. We appreciate your feedback, and we would like to address a few of the concerns and questions raised. This will address some of the common questions and concerns raised about the dependent audit. Additional questions and answers of common interest will be added as needed.

Q: Why is ABX conducting this audit?

A: The increasing cost of health care continues to affect many employers across the country, including ABX Air. As part of our efforts to control costs, ABX Air decided to conduct an audit of all dependents enrolled in our medical plan to ensure each dependent is truly eligible for our coverage.

According to a USA Today article, many employers have found up to 10 percent of the enrolled family members were ineligible to enroll in their plan.¹ This results in significant and unnecessary extra costs, which increases the cost the company and you pay for health insurance. Dependent coverage is an important part of your benefits package. We want to ensure that only eligible dependents are provided coverage under our benefits program so we can continue to offer affordable coverage.

From the start of the audit through today, about 4.5 percent of the dependent population (479 people) have been removed from the ABX health plans, which represents an estimated $450,000 savings. Based on the experience of other employers, we would expect between 5 percent and 10 percent of the dependent population to be removed, resulting in significant savings to our health plan and helping to keep our health plan affordable for employees.

1 USA Today: Employers Check Family Ties to Cut Health Care Rolls, by Julie Appleby, April 6, 2004.

Q: Why is ABX using a third party to conduct the audit instead of doing it themselves? How can I be sure that this company is okay to release my personal documents to?

A: Because of the complexity of this project, ABX has outsourced the administration of this project to Mercer Administration. Mercer is a leading benefits consulting and service provider in the country and has completed dependent audits for several larger employers without incident. Mercer is the current consultant and actuary for ABX health insurance plans. ABX has had a long-term relationship with Mercer and has a current business contract and a confidentiality agreement with Mercer.

In addition, all Mercer employees undergo background checks prior to employment. Strict confidentiality and data security protocols are in place and adhered to. All Mercer employees having completed HIPAA privacy training and are in compliance with HIPAA guidelines. Once the audit is complete, all documents will be destroyed.

Q: I already verified during the amnesty period that my dependents were qualified to be on the plans. Why am I being asked to provide proof?

A: Although about 4.5 percent of the total dependent population was removed from the plans during the amnesty period, it is possible ineligible dependents still may be on the plans. Our experience indicates that many employees are unaware or do not understand the complex definition of eligible dependents. This is especially true with step-children, other children, and ex-spouses. In order to be fair to everyone, a complete audit of all records is necessary.

Current market studies show that a complete dependent audit, followed by random future audits, will ensure only eligible dependents are enrolled in our plans, and this in turn will help control our medical costs. We appreciate your help in supplying the requested documentation in order to eliminate any final ineligible dependents from the ABX health plans.

Q: I was married out of state/out of country. How can I get a document in time to meet the Sept. 15 deadline?

A: We have made a couple of changes in order to help you fulfill all deadlines.

First of all, we now will be accepting church marriage certificates. We apologize for any confusion this may have caused with the original letter in which we stated they would not be accepted. A copy of the marriage license showing the marriage was solemnized also would be acceptable.

As an alternative to the marriage certificate or birth certificate, Mercer also will accept tax forms showing your spouse and/or dependents' names, in lieu of a marriage and/or birth certificate. For proof of marriage, the tax form must show married filing jointly or married filing separately. For children, the tax form must list the children's names. You may black out all financial information; however, the dependents' names and the employee's signature must be visible. We hope this will alleviate any undue stress or costs to our employees.

Q. Do I need to send an original certified copy of these documents?

A. No, a legible photocopy will be acceptable.

Again, we appreciate your attention to this Dependent Audit and your help in assuring only eligible dependents are covered under the ABX health care plans.

If you questions that about the dependent audit, please contact Mercer Administration Customer Service assistance at at (877) 372-3757 between 8:00 a.m. and 5:00 p.m. Central Time.