Ongoing vs. One-Time Dependent Eligibility Audit Verification: Which Way is Right for You?
Covering dependents who aren’t actually eligible for the benefits they are receiving can cost companies a lot of money – as much as $3,500 annually per ineligible dependent. However, conducting an audit is too time consuming for most HR teams to do on their own. On top of that, dependent eligibility verification requires more than just an initial full audit – ongoing audits are important too. Keep reading to learn the difference between initial and ongoing audits and why it’s important to have both.
What is a Dependent Eligibility Audit?
Dependent eligibility audits are exactly what they sound like – a review of the dependents receiving benefits on behalf of an employee that ensures they are truly eligible. In recent years this has become a popular cost-saving measure for employers as benefit costs continue to rise. Companies can save an average of $3,500 annually per ineligible employee removed without reducing benefits or increasing co-pays. Additionally, running an audit can protect your employees from accidentally committing insurance fraud all while saving time, minimizing risk and enforcing compliance for HR teams. However, a singular audit at one point in time won’t continue to ensure all dependents are eligible. Ongoing verification is key to ensuring these results stay.
Initial vs. Ongoing audits
Initial full audits of employee populations are important – they filter out anyone who is ineligible or may have become ineligible but has still been receiving benefits. Whether it’s from divorce or a child aging out, employees might not always think to remove them from their plans or realize this makes those dependents ineligible. An initial audit will scan for these scenarios so that these dependents can be removed, providing large cost savings to employers.
Ongoing audits are the process of requiring documentation to verify a dependent’s information and eligibility at the point of enrollment. For example, it would require a marriage certificate for a spouse dependent or a birth certificate for a child dependent. While an initial full audit will scan for current ineligible dependents, ongoing audits ensure that you are only covering eligible individuals going forward. It’s important that you do both an initial and ongoing audit to not only prevent unnecessary costs but also protect yourself and your employees now and in the future.
Why Consider an Outside Vendor?
If these processes sound time consuming and tedious… that’s because for many overwhelmed HR teams, they are. Using dependent verification services and tools can save up to 70% of manual HR time and effort. As a result, many companies choose to outsource both initial and ongoing dependent eligibility audits to their ben admin provider because they already have all the key data within the platform and can be more automated.
Best-in-class providers will have their team members identify all enrolled dependents, print and/or send verification letters, request and verify documentation, and remove any ineligible dependents on your HR team’s behalf. Additionally, their teams will verify the dependent verification documents and either approve or reject them as they come in during OE. While this type of service works great for initial full audits, there is a lot of room for human error when it comes to ongoing audits. That’s why we’ve created DependentIQ.
DependentIQ is an instant, AI-powered eligibility verification tool that automatically detects key data elements in valid eligibility documents and approves or denies them instantly, preventing ineligible dependents from ever being on the system or enrolling in your plans. If for some reason the document is denied, it is then passed on to either our services team or your HR team for the official decision. This eliminates document review backlog and reduces the risk of human error. Additionally, employees enjoy the convenience of being able to upload their documents right from their phones!
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