Dependent verification has been largely embraced by corporate America as a standard element of benefits enrollment, but there are still lingering assumptions that incorrectly deter some employers (and brokers) from realizing the savings and other benefits from a Dependent Audit.
“My employees will revolt”
On the contrary, Dependent Audits have shown no impact on turnover in employed positions. Employees understand that in order to receive the best benefits possible through work, the company has to make sure to only cover those dependents that are eligible. It also helps employees to understand that Dependent Verification helps with a Federal requirement that has to be enforced (ERISA).
“We don”t have any fraud”
Auditors like DSI have identified and removed ineligible dependents in companies as small as 20 employees. It is true that the larger the company, the higher the rate of ineligible dependents, but smaller companies are still surprised when they find that employees are divorced or covering fiancés or other costly ineligible dependents. The data reveals that rates of ineligibility have gone UP since adoption of PPACA, and fraud, intentional or accidental, exists in businesses of every size.
“We don”t have the internal resources for a dependent audit”
This is probably true. Most HR departments do not have the resources to administer a Dependent Verification Audit. The sheer volume of verification paperwork makes the job prohibitive, which is why most HR departments hire an outside firm like DSI to conduct the audit. The best Dependent Audit vendors provide an entirely customized experience and work with and around the scheduling needs of HR to complete the audit with as little work disruption as possible.
“We don”t have the money”
Some audit companies (including DSI) offer flexible billing terms where the client does not have to pay anything out of pocket for a dependent audit, but only out of savings. The average Dependent Audit has an ROI of 500%-1,500%, with ROI frequently reaching 5,000% or more. And with spousal benefits costs regularly exceeding $5,000 to self-funded plans, it doesn’t take many ineligible removals for an audit to completely pay for itself.
Dependent Verification Audits are proven to save companies substantial sums of money and increase plan compliance. For more information on Dependent Audits or an analysis on how a Dependent Audit might help your organization, contact DSI here.