In the dynamic world of optimizing operational efficiency and maximizing cost savings, employers are continually exploring innovative solutions. One often overlooked yet financially beneficial strategy is the active implementation of dependent verification audits. Dependent verification audits present a treasure trove of opportunities for businesses aiming to cut costs.
How does a dependent audit effectively reduce health care spending?
Health insurance expenses frequently make up a significant portion of an organization’s budget. Dependent verification audits play a pivotal role in slashing these costs by ensuring coverage only extends to eligible dependents. This targeted approach helps employers steer clear of over paying premiums.
Minimize compliance risks
Furthermore, audits actively minimize compliance risk. As plan sponsors, employers bear a fiduciary responsibility to plan participants. They must guarantee that only eligible dependents, as defined in their Summary Plan Description, are enrolled in coverage. Ensuring a clean slate with no ineligible dependents throughout the entire enrolled population is crucial to sidestep hefty penalties related to ERISA. Plan administrators who violate ERISA legislation may face penalties, potentially amounting to up to $1,000 per day.
Conducting a dependent verification audit is a proactive measure that shields employers from exposure. Even having just one enrolled, ineligible dependent on the plan may cost employers thousands.
Protect your bottom line
To safeguard your bottom line, it is imperative to actively identify and remove ineligible dependents. Employers can see a significant impact on their bottom line by proactively implementing dependent verification audits. As businesses navigate the ever-evolving landscape of financial challenges, dependent verification audits stand out as an effective solution for keeping health care cost under control.
At ebm, we actively assist employers in saving between 5 and 8% annually on health plan costs through our dependent verification services. Dive deeper into how ebm actively protects your bottom line by learning more here.