Is everyone that is currently enrolled in your company’s group health plan actually eligible to receive benefits?

Are you sure about that?

Research shows that 4%-8% of company health plan participants, on average, are actually ineligible to receive benefits. That’s a lot of money!

This is exactly why you need a dependent verification audit. This simple and effective process takes a fine-toothed comb through each of your group health plan’s dependents and verifies eligibility through a meticulous audit. Completing audits every few years will ensure you are compliant with ERISA and Sarbanes Oxley regulations and that you are controlling health care costs, enabling you to save money and reinvest elsewhere.

The word “audit” might sound unnerving; but, don’t fret – the process is actually very straightforward and only takes a few weeks to complete. We’ve got the rundown on the top reasons to stop waiting and schedule your dependent verification audit today!

1.) Quick to Set Up 

Completing a dependent verification audit is a fairly simple exercise. The entire audit and verification process only takes 12 weeks (on average) from start to finish.

Dependent Verification Process:

• Weeks 1-2 → Planning
• Weeks 3-10 → Audits
• Weeks 11-12 → Appeals

During the first two weeks, we will work closely with your team to get to know your organization’s unique dynamic and challenges. Next, we will spend ~8 weeks communicating with your employees and actually auditing your company’s dependents. This process requires working one-on-one with your health plan enrollees to collect the proper documents to verify their dependents, which might include marriage certificates, birth certificates, court papers, etc. Finally, we allow ~2 weeks for any audit appeals and plan cancellations.

It’s that easy!

2.) Easy to Conduct 

Dependent verification audits are easy to conduct. The process simply entails looking at each of the dependents currently enrolled in your company’s group health plan and collecting the appropriate items to verify that each dependent is eligible to receive coverage. There are several types of audits to consider when making a decision.

Dependent verification audits:

• Full Audit: captures documentation on all dependents
• Affidavit-Style Audit: requires just a signature from employees
• Targeted Audit: only audits a specific group of employees
• Mixed Audit: full documentation needed for some employees, affidavit needed for others.

Though there are certainly use cases for each type of audit, full audits yield the best results! A full audit is consistent among employees and requires employees to actively read and engage with communications.

3.) Easy to Outsource

Today’s human resources departments are lean, mean, people managing machines. Adding yet another task to an already full plate can seem daunting. This is where outsourcing comes in handy. Outsourcing takes the pressure off HR and allows your team to focus on their core job functions, like recruitment, employee engagement, and benefits management. 

Four benefits of outsourcing dependent verification:

• Let someone else handle the communications and follow-up
• Ensures objectivity
• Eases communication to employees
• Reduces risk of objections from unions and other groups

Do employees have questions? No problem, your dependent verification account manager will be happy to help. Don’t have time to collect and verify documents? Of course, you don’t, that’s why you outsourced! We’ve got you covered.

4.) Makes HR a Hero

Let’s face it – HR is not always considered the “favorite” or “fun” department. However, the cost savings that come with a dependent verification audit will definitely shine a light on human resources and remind everyone the value that HR brings to the table. 

The first step to heroedom is to get buy-in from appropriate parties for the dependent verification audit.

Keys to positioning an audit internally: 

• Be prepared to overcome objections
• Consider amnesty for removed dependents
• Involve all levels of management, union reps, etc.
• Develop a detailed timeline of the process – the best time to conduct an audit is outside the open enrollment period
• Communicate, communicate, communicate

Then, you’ll need to efficiently and effectively communicate the dependent eligibility verification process to impacted employees.

Communication tips:

• Use multiple communication channels: email, snail mail, posters, video, carrier pigeons, etc.
• Include calls-to-action and deadlines in all communications
• Keep emails shorts and sweet and make then scannable
• Use attention-grabbing subject lines

5.) Furthers Compliance

Though the cost control aspect of dependent verification often steals the spotlight, it’s important to remember that compliance is a crucial element of HR administration. It is considered a direct ERISA violation if a self-funded medical plan uses employee contributions to fund the claim payment of ineligible dependents. Furthermore, Sarbanes Oxley requires stringent fiduciary oversight of publically-traded companies, including the administration of benefits spending. By auditing your current health plan dependents, you will be ensuring that your company remains compliant with federal health care regulations, protecting your company from expensive fines and potential litigation.

6.) Reduces Stop-Loss Exposure

For self-insured businesses, stop-loss insurance can be a valuable tool to stop the financial bleeding during expensive health emergencies. However, if ineligible dependents are identified during a stop-loss claim, it can be a devastatingly expensive mistake for your company. In many cases, the insurance carrier may refute the claim, sticking either your company or your employee with the full cost of health care.

 7.) Generates Sizable Savings

Perhaps the most obvious reason to complete a dependent verification audit is the cost savings. Providing benefits to dependents that are not eligible costs your company valuable money that could be used elsewhere. See how we helped save GRPS over $800k annually.