Congratulations on your decision to complete a dependent verification audit! This strategic audit will guarantee that every person on your company’s health plan is actually eligible to receive coverage, which will support compliance and cost-saving efforts for your organization.
However, deciding to complete an audit is one thing. Effectively and tactfully communicating this decision to your employees is another animal entirely. Just the word ‘audit’ can instill a negative tone across an organization.
Get ahead of the game with a comprehensive communication plan to clearly and concisely convey processes, requirements and timelines, and to reassure employees that this routine process is not a punishment but a common business best practice.
1.) Keep Employees In The Loop
Like most things in life, waiting until the last minute to communicate your audit to employees is a recipe for disaster. Prompt communication will allow plenty of time for your employees to ask questions and prepare the necessary documents to complete the audit. Put yourself in their shoes – how would you feel if your employer gave you one week to essentially prove that you and your family are eligible to receive benefits?
How early should you start informing your employee base? Ideally, as early as possible. But in general, we recommend communicating the audit at least 3-4 weeks prior to document submission.
Use Multiple Channels
Your workforce is likely comprised of multiple demographics. Incorporating multiple communication points into your plan will help make sure that you are reaching each employee population via the channels that they respond to best. Consider using both print and digital communication opportunities for the best results: posters, postcards, email announcements, social media (private group, company Slack, etc.), text message alerts, video, carrier pigeons – whatever it takes!
Use Layman’s Terms
Most employees are not going to know the ins and outs of HR acronyms. When crafting communications, use industry jargon sparingly and take the time to spell out and define technical terms when necessary.
Set The Appropriate Tone
As noted earlier, the word ‘audit’ has a fairly negative connotation. Put your best foot forward and encourage a positive mindset throughout your communications by carefully choosing your words. Avoid using words with a negative tone like ‘must’, ‘penalty’, and even ‘audit’ during communications. (Yes – we realize the name of the process is ‘dependent verification audit’ – but you can put your own positive spin on things. Or, simply refer to the process as ‘dependent verification’.)
2.) Define Eligibility & Expectations
Who is actually eligible to be on your current employee benefits plan? What happens if an employee does not submit documentation on time? Get ahead of employee questions by clearly and concisely outlining the audit requirements and expectations. The best route is often a digital or print FAQ sheet that can easily be shared and referenced.
3.) Communicate Requirements & Timelines
Employees will need adequate time to collect and submit the required documentation for the audit. We typically recommend a period of 3-4 weeks of communication and then a 4-8 week window for document submission. Your communications should include exact dates and deadlines for submission periods and a precise list of all of the documents required for each possible dependent scenario. Be sure to also include an easy to reference checklist of how to submit each document for consideration to avoid confusion during the process.
4.) Highlight Savings & Long-Term Impact
What is the long-term benefit of conducting an employee eligibility audit? Employees often assume the worse and might harbor some initial resentment about the thought of their family members being removed from health plan coverage. Mitigate this concern by highlighting the positive outcomes that will result from the audit and, ultimately, why your company is going through with the audit in the first place.
- Savings = Maintaining (or possibly decreasing) health plan costs
- Compliance = Meeting legal requirements, avoiding costly organizational fines
It is important to also make sure your employees know that eligible dependents are always welcome and that the audit exists to remove health plan participants that are actually not legally allowed to receive coverage.
When it comes to open enrollment, having a robust strategy in place is key for success.
Employers need to consider not only how to educate and inform employees about available options, but also about the best way for employees to enroll in their benefits.
There are two primary approaches to open enrollment: active enrollment and passive enrollment.
What do “active” and “passive” mean when it comes to enrollment? And is one approach better than the other?
The waters are a bit muddy as the answer is truly subjective and can vary based on your individual organizational resources, needs and goals.
A 2011 SHRM report found that over 71% of employers relied on a passive enrollment strategy, though the tides are changing as employers look to control health care costs and increase engagement throughout the organization. An updated report by JP Griffin found that 50% of employers now favor an active enrollment—a 20+% shift in strategies.
We explore both options (active vs passive) below to help you make the decision that’s best for your organization.
What is ‘Active’ Enrollment?
Active Enrollment is a benefits enrollment strategy in which every employee must re-evaluate their previous benefit choices and elect from current options for the upcoming year. Employees are actively going through the full enrollment process each year rather than just signing off on the same benefits as the year before. Learn more about active benefits enrollment here.
Pros of Active Enrollment
- Active enrollment forces employees to review and re-select their benefits at least once a year. This helps to ensure that each employee’s benefit elections are appropriately tailored to their present situation.
- It gives employers a better opportunity to educate their workforce on plan changes and new benefit options. For example, if an employer is introducing something like an HDHP with an HSA, an employee is more likely to review the new plan(s) and reconsider their options.
- An active enrollment approach provides opportunities to improve the integrity of your data—including emergency contact information, beneficiaries and eligible dependents. For example, while reviewing eligible dependents, you may discover that dependents, ex-spouses or others are no longer entitled to benefits under your plan.
- A MetLife study found that employees who completed an active enrollment were three to five times more likely to elect voluntary benefits.
- An active enrollee is more likely to drop benefits they no longer need while enrolling in new benefits options that appeal more to them.
- Active enrollment also ensures that benefits which legally cannot be treated passively are not overlooked. While contributions to HSAs and 401(k)s can be adjusted throughout the plan year, the “use-it-or-lose-it” nature of both Dependent Care FSAs and Medical FSAs prevents them from being eligible for rollover elections and revisions throughout the year.
Cons of Active Enrollment
- Active enrollments require more time and effort from HR and benefits teams. This can be a challenge for small teams or organizations with limited resources.
- Employees that do not make their benefit elections during open enrollment can lose their coverage for the year.
What is ‘Passive’ Enrollment?
On the other hand, Passive Enrollment is a benefits enrollment strategy that employers use to allow employees to simply re-enroll in their current choices with little to no involvement in the open enrollment process. Employers who use this strategy simply rollover each employee’s benefit elections from the previous enrollment period.
Pros of Passive Enrollment
- Passive enrollment is simply easier on both the employer and the employee. Employees check off a “re-selecting” box, giving employers less of an administrative burden to deal with.
- It allows employees to roll over their benefits from the previous year, without having to take the time to assess their plan options and re-evaluate benefits.
- Automatically enrolling employees in previous year selections can prevent employees from losing coverage for not actively participating.
- A passive enrollment approach saves time for everyone.
Cons of Passive Enrollment
- Important employee data—like personal information, benefits information, etc.—can easily become outdated if it is not evaluated on a regular basis.
- New programs, benefits, and plan changes are often overlooked. Because of this, participation rates in high deductible plans, HSAs and voluntary products can be significantly lower.
- Employees are less likely to re-evaluate and update coverage based on their current needs and are less likely to drop coverage they might no longer need.
Active and passive enrollment both have their advantages and concerns, so which open enrollment strategy is better?
We typically recommend an active enrollment each year. Hosting an active enrollment process better educates and engages employees with their benefits and requires them to actively evaluate about their options.
When a passive enrollment strategy is used, many employees simply let their benefits roll over and don’t even consider making any changes or updates to their elections, which can result in a myriad of issues over time.
“If you’re not requiring people to go in and make a choice every year, you just can’t grab people’s attention. It’s one of those tough-love approaches where you want to make sure that people take the time to make good decisions for their own best interest.” – Meredith Ryan-Reid, MetLife (via SHRM).
Tips For Managing An Active Benefits Enrollment
- Complete a dependent audit a few weeks prior to open enrollment. This will drive savings and compliance by eliminating any ineligible dependents from your health plans.
- Have a communications plan in place that incorporates multiple channels at various points before, during and after open enrollment.
- Incorporate multiple educational initiatives and tools into your enrollment strategy: benefits guides (both print and digital), educational videos, and one-on-one consults can help address the needs of a diverse workforce.
- Ask employees to verify and update their personal information prior to enrolling—this will ensure that everything is as up-to-date as possible.
- Invest in decision support tools—either a benefits administration platform that offers basic built-in tools or an add-on service like ALEX from Jellyvision. Studies have shown that decision support not only helps employees feel more confident about their benefits decisions, but also can increase benefit account and retirement savings contributions and HDHP enrollment
5.) Make Completion Convenient
Sifting through old documents, making copies, and submitting them via the proper channels isn’t the most thrilling way to spend free time outside of the office. People do not like being inconvenienced, so partnering with a dependent audit solution that is simple and painless will provide a much better employee experience. Look for a partner that will completely own the process from start to finish and that will guide and support your HR team through the communication and submission process.
Additionally, offering a defined grace period, particularly for your initial audit, will provide a cushion for removed dependents to arrange alternative coverage. This will ease employees’ minds about the possibility of loved ones being left without any help.
Want More Dependent Audit Tips?
Contact us today for a free dependent audit discovery session. Our experts are here to help!
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