Is That Your Family? Next Year, Your Boss May Ask You to Prove It

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With healthcare costs set to rise next year, your employer will still cover you – but you'll have to prove your family is really your own.

Newspaper reporters have an expression: “If your mother says she loves you, check it out.”

Next year, employers who offer health insurance will have a new expression of their own: “If your mother says she’s your mother, we’re gonna check her out.”

That’s because the new healthcare legislation that President Obama pushed through Congress sets some important deadlines for 2011. A big one is this: Employers must offer coverage for their workers’ dependents until they’re 26 years old.

Right now, those laws vary by state and usually top out at 23. So adding a few years will seriously hike costs, says a new report from Price Waterhouse Coopers.

The report, titled “Behind the Numbers,” predicts employers will pay 9 percent more next year on healthcare coverage – which is actually an ever-so-slight drop of a half-percent in the rate of increase from 2010.

But to keep costs down, expect to provide documentation of your dependents – or be denied coverage. So don’t lie about your children’s ages or insist your daughter-in-law is your daughter.

Documentation you could potentially be asked to produce: birth certificates, marriage licenses, domestic partner affidavits, legal guardianship papers – potentially even proof of immigrations status.

Auditing the eligible employees of employer-sponsored health plans is a growing business, with companies like ConSova doing the work of verifying dependents.

“Executives are asking whether or not the company is really doing everything it can to cut plan expenses,” ConSova CEO Michael Smith said. “Most are probably aware that they’re covering a number of ineligibles, but they may not realize just how much this unnecessary coverage costs. With near double-digit cost increases on the horizon, there’s never been a better time to reduce the burden of ineligible dependents.”

ConSova says ineligible dependents eat up as much as 6 percent of self-funded insurers’ total annual health plan expenses, costing both small and large companies millions of dollars.

So if you have dependents, keep their paperwork handy – because you might just need it for your next open enrollment.

Stacy Johnson

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