A dependent verification audit is a process conducted to confirm the eligibility of dependents claimed by employees in a group health plan. Dependent verification audits are outsourced to specialists who can streamline the audit process.
Why more employers are looking to audit
Employers strive to provide employees and their families with great healthcare coverage at the best cost. However, as healthcare costs rise, companies are turning to dependent verification audits as a proactive measure to realize significant cost savings. Not to mention stay in compliance with rules outlined in the summary plan description, as well as compliance with ERISA & Sarbanes-Oxley.
Best practices
Of course, you want to ensure a dependent audit goes smoothly. Follow these best practices for a hassle-free audit process:
Clear communication
Effectively communicating the purpose and process of a dependent verification audit is crucial for both employers and employees. Employers should clearly outline what the audit entails and what documents employees will need to provide.
Transparent communication builds trust and helps employees understand the importance of the audit. Additionally, setting clear deadlines for submission of required documents ensures a smooth and efficient audit process.
Conduct both types of audits
There are two types of dependent verification audits: initial and ongoing audits. It’s highly recommended to perform both audits to ensure organizations don’t leave themselves exposed.
Initial audits: Examine entire enrolled population to identify any ineligible dependents.
Ongoing audits: Verify the eligibility of newly enrolled.
Conducting both types of audits is crucial for a comprehensive and thorough review. Initial audits are a point-in-time audit that addresses the enrolled population at that time, while ongoing audits ensure current compliance for newly added dependents. This provides a holistic approach to dependents’ eligibility verification.
Find the right partner
Outsourcing dependent verification audits to a third-party partner has become a common practice among employers. Engaging a specialized provider can streamline the audit process, reduce the burden on internal resources, and ensure impartiality in the review.
The right partner brings expertise, easy-to-use web portals, and a neutral perspective to the table, enhancing the credibility of the audit. Outsourcing helps maintain positive relationships between employers and their teams. Bringing in a neutral third-party to facilitate difficult conversations about loss of coverage for loved ones helps keep the good vibes.
Conclusion
As the landscape of employee benefits continues to evolve, dependent verification audits have emerged as a proactive strategy for employers to ensure cost-effectiveness. Clear communication, a comprehensive approach to auditing, and the involvement of a trusted partner are essential elements for success in navigating the complex terrain of dependent verification. By embracing these practices, employers can not only cut down on benefits spending, but safeguard their benefit programs as well.
Ready to cut down on benefits spending? Work with ebm for our dependent verification services. ebm’s services for dependent verification contribute to an average annual savings of 5-8% on total health plan costs for employers. We collaborate with you to create a project timeline aligned with your goals and objectives. Allow us to handle the intricate details while you concentrate on what matters most – your people.
