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First Data Ongoing Dependent Verification

January 2011

December 2010

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Agenda

Purpose of Dependent Verification

Services Provided

Document collection and the Dependent Verification process

Example

Timeline

Summary and Key Messages

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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 25th(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.

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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.

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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

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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

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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

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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

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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

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Name Type of Dependent Required 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

Tommy Jane and John’s Biological Child born in 2000

1. Government Issued Birth Certificate

Suzy John’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

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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.

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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

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Questions?????