In an effort to control costs, the Public Employee Benefits Authority (PEBA) will begin auditing subscribers who cover dependents to ensure that only eligible dependents have coverage through PEBA. Dependent eligibility verifications audits have been used by Fortune 500 companies for more than a decade.
According to most experts, 4 to 8 percent of dependents covered under an employer-sponsored plan are ineligible for coverage. These dependents are often divorced spouses, grandchildren or other family members who are not eligible for benefits. About 187,000 dependents have health coverage through PEBA. Based on these estimates, 7,500 to 15,000 may not be eligible for this coverage.
In 2009, the average cost per dependent under the State Health Plan was more than $2,600. If only 4 percent of covered dependents turn out to be ineligible, conducting this audit will save our self-insured plan more than $19 million a year.
There are two separate parts to the audit process:
- The initial audit cycle is expected to take 18 to 24 months to complete. At some point during the audit cycle, all current subscribers who cover dependents will receive a letter from PEBA asking them to submit documentation (PDF) to verify the eligibility of each of their covered dependents. If the subscriber does not provide documentation within 60 days of the audit request, his dependent will be dropped from coverage. Because this is not considered a qualifying event under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), the dependent would not be eligible to continue their coverage and would have to wait to enroll in coverage based on a special event or during open enrollment (October every year, effective January 1 of the following year).
- Beginning May 2, 2011, PEBA will also require documentation (PDF) at the time of enrollment for dependents of new hires and dependents added during open enrollment or due to a special eligibility situation. Documentation must be received and approved by PEBA before any of the benefits selected will become effective.
For more information about the audit, you can visit the PEBA website or review our Frequently Asked Questions (FAQ).
You may also voluntarily submit the required documentation for your dependents. Please print the Self Audit (PDF) form and send to PEBA. Do not send this form to Human Resources.
If you have any questions or concerns, please contact PEBA at 888-260-9430.
Frequently Asked Questions
I have submitted the requested documents. What should I do next?
You do not need to do anything at this time. Your documentation will be reviewed to determine your dependents’ eligibility. If all dependents on your coverage are eligible, your coverage will not change. If any dependent on your coverage is deemed ineligible, you will receive a letter to notify you of the termination and explaining your right to appeal.
Why is EIP conducting this verification audit?
Your employer-sponsored health insurance is a valuable benefit, but it is also a costly one. It becomes more costly to you and your employer when ineligible dependents are covered. The audit is to ensure that only eligible dependents are covered under your state benefits. This will help us control costs and ensure enrollment files are accurate.
Why am I being required to submit verification of my family members but my coworker is not?
The dependent eligibility audit is an ongoing process. EIP anticipates it will take 18 to 24 months to complete. If your coworkers are covering any dependents, they will be required to submit verification before the audit is completed.
My child’s birth certificate says “Do not copy.”
For the purpose of this verification audit, a copy will be acceptable.
What can I do if an eligible dependent is removed?
You have 90 days from the date your dependent’s coverage is canceled to appeal the decision. Include the required documentation to support eligibility with your request. Instructions on how to appeal will be included in the termination notification.
What types of dependents are being verified/audited?
Any family member covered under one or more benefits offered by EIP is subject to verification.
Where can I get a copy of my child’s birth certificate?
Your local South Carolina Department of Health and Environmental Control office can assist you with this. Be sure to ask for the “Long Form,” which includes the parents’ names. If your child was not born in South Carolina, you can find information on how to request his birth certificate at the CDC website.
My child's birth certificate has my previous last name and not my current last name. Will EIP require any additional documentation to verify our relationship?
Not at this time. EIP will review the documentation submitted, and will contact you within 10 business days if additional information is needed.
What type of documentation will I be required to submit?
A complete list of acceptable documents will be included on the verification worksheet. The most common documents will be a birth certificate, marriage license and/or the front page of your most recent tax return.
My spouse and I file our taxes separately. What should I send?
A copy of both your and your spouse’s most recent tax return, with all financial information blacked out.
Why aren't my dependents being offered COBRA?
Termination of a dependent who was not eligible for coverage is not a COBRA Qualifying Event. Therefore, the dependent is not eligible for COBRA coverage.
Will EIP review birth records from other countries?
Yes. If the documents you submit are not sufficient, EIP will contact you for additional information before the child is terminated from coverage.
Where can I get a copy of my marriage license?
Visit the CDC website to find information on how to get a copy of your marriage license.
I have been married for many years. Why can’t you accept a copy of my marriage license?
The purpose of the audit is to ensure that only eligible dependents are covered by the plan. A marriage license, along with a copy of page 1 of your most recent tax return, ensures that you are covering a current spouse and not a former spouse. Former spouses are only eligible if the divorce decree mandates coverage.
You should black out all financial information from your tax return before sending it.
I missed the deadline to submit the required documentation. What should I do?
Submit it as soon as possible. If your dependents have not already been removed from coverage, the documentation will be accepted. If you have already been notified that your dependents have been removed, you may appeal the decision. Include the required documentation to support eligibility with your request. Instructions on how to appeal will be included in the termination notification.
I have been audited and cannot find the birth certificate for one of my three children. I have requested a copy, but it will not arrive before the deadline. I have documentation for the other two children. What should I do?
EIP would prefer that all documents be submitted at the same time; however, we understand there may be a time when that is not possible. If you are unable to obtain documentation for one of your dependents before the deadline, you should submit the Dependent Verification Form and documentation for the remaining dependents to ensure their coverage will continue. Only the dependent without documentation will be dropped from coverage.
You have 90 days from the date of termination to submit the required documentation for the terminated dependent. If you receive the documentation within 90 days, you may submit documentation along with a letter of appeal to: EIP Appeals Committee, Employee Insurance Program, PO Box 11661, Columbia, South Carolina 29211. If the documentation is acceptable, the dependent will be reinstated without a break in coverage.
Will I receive something from EIP confirming that my documentation has been accepted?
EIP will not send confirmation letters. You can log in to My Benefits and select "Review Benefits" from the drop down menu. Under the dependents name that is being audited, it will say "No" if the audit is not complete. Otherwise it will list the date they have approved the documentation.
I am recently married and my spouse isn’t listed on my tax return. How do I show we are married?
If you have been married for less than one year, EIP will accept a marriage license as verification, and you do not need to submit a tax return.
My child’s birth certificate does not show the name of the parents.
Most states (including South Carolina) offer both a short and a long form of a child’s birth certificate. The long form includes the parents’ names and is the only birth certificate that will be accepted.
Should I send originals?
No. Send copies only. After the documents have been electronically added to your file, the paper documentation will be destroyed. Be sure that the copies you send are legible.
What happens if I do not respond to the verification request?
If you do not respond, your dependents will be removed from your coverage.
Where can I get a copy of my latest tax return?
If you need a copy of your tax return, you may request it from the IRS. Visit the IRS website and click on the link for "Individuals" then the link “Need a Copy of Your Tax Return Information?”