UNIVERSITY PARK, Pa. — Penn State's Office of Human Resources has completed the Dependent Verification Program, a strategic initiative of the University identified for cost savings and adherence to human resources best practices.
University officials reported a 95 percent response rate among 11,820 applicable faculty and staff during the program's enactment. Total cost savings from the Dependent Verification Program is estimated at more than $5 million annually. Cost savings to the health care plan are considered avoided costs to the plan, which helps hold down the cost of health care for all employees.
"We consider the Dependent Verification Program a phenomenal success and are pleased that we have achieved a high standard of best practices through its implementation. The program will realize significant, ongoing savings for the University and its employees. The health benefits portion of the verification alone will realize nearly $3.6 million in savings," said Susan Basso, vice president for Human Resources. "In addition, the tuition discount savings will be approximately $1.5 million per year. I want to thank all faculty and staff who participated in this monumental effort.”
Employee dependents are defined as children, spouses or domestic partners who receive at least one form of University health care coverage — among medical, vision and dental coverage — and/or the tuition-discount benefit noted in policy HR37, "Grant-in-Aid Tuition Discount for Dependents of Faculty, Staff and Employees." Prior to rollout of the Dependent Verification Program, eligibility criteria for dependent coverage were communicated through the University's Summary Plan Description, the Employee Self-Service Information System (ESSIC) and, for tuition benefits, policy HR37.
Between January 1 and May 1, a comprehensive series of mass notifications and direct communications to employees sought benefit eligibility verification for their dependents using official documentation. Employees who did not respond to verification requests, or whose dependents did not provide appropriate documentation, were removed from the University's health plan as of May 1. Those who were determined ineligible for a tuition discount will no longer receive the benefit starting with summer 2013 sessions. Those who have been removed from these benefits may appeal their benefits standing during the next two months through Aon Hewitt, the human resources consulting firm the University engaged for the program's delivery. Successful appeals will have appropriate dependent benefits reinstated retroactive to May 1.
Of 24,980 employee dependents receiving at least one form of health coverage as of spring 2013, 3.5 percent, or 885, were found to be ineligible for coverage. Among them are 477 who voluntarily dropped medical, dental and/or vision coverage. The primary reason noted for self-identified removal was duplication of coverage, followed by divorce. The remaining 408 dependents removed failed verification. Similarly, of 2,536 employee dependents receiving the tuition-discount benefit, 5.7 percent were found by Aon Hewitt to be ineligible. Those 154 dependents included 89 who voluntarily dropped requests for the benefit and 65 who failed verification.
The return on investment for carrying out the Dependent Verification Program, a one-time expenditure of just under $150,000, has been recognized as highly cost-effective for the University. “We are happy to report that the cost to engage Aon Hewitt to conduct the verification services has been recovered several times over,” Basso noted.
New University employees are asked to provide dependent verification with Human Resources when they enroll for benefits. All employees are reminded to update Human Resources with any life-changing events, such as marriage or birth of a child, to adhere to Human Resources' goals of employee adherence to University policies and 100 percent management of dependents receiving benefits.