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To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Aon Hewitt. First Data Ongoing Dependent Verification January 2011
December 2010 2 Agenda Purpose of Dependent Verification Services Provided Document collection and the Dependent Verification process Example Timeline Summary and Key Messages
December 2010 3 Conducting a Dependent Verification What Is Dependent Verification? A dependent verification is a process where employees must provide specific documentation indicating that their dependents are eligible for medical, dental and vision coverage. Who Is Impacted by the Dependent Verification? The dependent verification process will apply to employees who enrolled during Annual Enrollment as well as to employees who adds a new dependent to benefits or is a new hire with dependents. There will be a gap or catch-up verification of all dependents added since the comprehensive audit was conducted last summer. It will cover all dependent additions from July 1, 2010 through January 25 th (approx). Why Is First Data conducting this verification? First Data has a fiduciary responsibility to manage health care costs and to ensure that the Plan covers only those dependents who are eligible.
December 2010 4 Statistics On average, 1% - 3% of employees voluntarily drop coverage for ineligible dependents during the verification process. (First Data had 1.27% dependents dropped voluntarily.) On average, 5% - 15% of dependents will be ineligible as a result of the verification process. (First Data had 6% dependents dropped during the verification process.) One dependent costs an estimated $221 per month towards health care costs. First Data 2010 Verification Results 1,233 dependents dropped from coverage for an estimated yearly savings of $2.77 million.
December 2010 5 Services Provided Documentation request, collection, and verification Inbound and outbound call center –Bilingual: English and Spanish –8:00 am to 7:00 pm (Central Time) Determine if verification documents are authentic and valid Assistance in locating state and county offices where documents may be obtained –Fees for obtaining documentation, such as a birth certificate and a marriage certificate, are the responsibility of the employee Custom web portal allows members to check verification status, view employee FAQ’s, access our resource library of county clerk and state office contact information, and upload documentation Secured document storage and document disposal following completion of the verification process
December 2010 6 Services Provided Verification documentation is requested from the employee Employee mails documents to the Dependent Verification Center, faxes documentation to the secured fax line, or uploads documentation via employee web portal Documentation is reviewed to verify eligibility –If all enrolled dependents are eligible, the employee is notified that the verification process is complete –If a dependent is ineligible, or if additional documentation is needed, the member is notified that proper documentation was not received, and an outline of missing documentation is provided Dependents removed from coverage because of lack of proof will not be eligible for COBRA coverage
December 2010 7 Eligible Dependents The verification requirements for each family will be determined by the eligibility criteria for the Plan in which they are enrolled; eligible dependents include: –Legal Spouse –Common Law Spouse –Same-Sex Spouse –Domestic Partner –Biological Children –Adopted Children –Stepchildren –Legal Guardianship –Foster Child –Disabled Dependents
December 2010 8 Ineligible Dependents Former spouse Individuals who are not: natural children, stepchildren, adopted children, or for whom the employee is not the legal guardian Children over the age of the Plan’s limiting age who have not been certified as medically disabled (age 26) Parents of employees Children of Domestic Partner
December 2010 9 Documentation Requirements Proof of dependent eligibility is two-fold: Proof that the relationship initially existed –Example: Government issued marriage certificate Proof that the relationship still exists –Example: 2009 or 2010 Federal Tax Return or Proof of Joint Ownership issued within the past 6 months (mortgage statement, bank statement, credit card statement, or other acceptable documents) The type and number of documents requested will vary by type of dependent Possible alternate documents –If the dependent is eligible to participate in the Plan, but the employee is unable to provide the documentation requested due to extenuating circumstances, we urge the member to contact the Dependent Verification Customer Care Center for alternate document options
December 2010 10 NameType of DependentRequired Documentation Jane (Employee John Smith’s wife) Jane and John were married in 1993 1.Government Issued Marriage Certificate and 2.2009 or 2010 Federal Tax Return TommyJane and John’s Biological Child born in 2000 1.Government Issued Birth Certificate SuzyJohn’s Step Child (Jane’s Biological Child) born in 1990 1.Government Issued Birth Certificate and 2.Government Issued Marriage Certificate and 3.2009 or 2010 Federal Tax Return Required Documentation Example
December 2010 11 Dependent Verification Process Timeline Day 1- A new dependent is added to First Data’s benefit plans via YBR Day 3-4- Verification Request Notice is mailed (includes specific documentation requirements Day 17- Outbound Courtesy Call (targeted to employees with unverified dependents) Day 24- Reminder Notice is mailed Day 33- Outbound Courtesy Call (targeted to employees with unverified dependents) Day 48- Communicated Verification Deadline Day 49- Coverage Termination Notice is mailed (opens silent extension) Day 63- Silent Extension Period Closes Day 64+6- Business Days- Final Results Notice is mailed Unverified dependents will be dropped within 7 business days of end of silent extension period.(67 days from the beginning of the verification period) ** Status notice will be sent to employee each time documents are received.
December 2010 12 Summary and Key Messages The verification process is First Data’s fiduciary responsibility to be in compliance with the Plan’s eligibility requirements Ineligible dependents add to the overall cost of the plan All correspondence should be sent to the Dependent Verification Center All questions concerning the process should be directed to the Dependent Verification Center by calling 1-877-335-0505 The Dependent Verification Process is essential in controlling health care costs and to maintain compliance