DSI Blog

Public Sector Dependent Audits

Public employers including Cities, School Districts, Counties and more continue to adopt creative solutions to curb the ever-increasing cost of health care.  For over a decade, Dependent Eligibility Verification Audits have been common in the private sector, but new data suggests the Public Sector is warming up to the concept as well.

Public Sector Dependent Audits

Details on Public Sector Dependent Audits

“This year the RFP activity from the Public Sector is more than double what it was last year,” says Louis DeLong, a VP Sales with Dependent Specialists, Inc.  “The driving factor is that instead of RFPs coming from counties or large metro cities with thousands of employees, we see more and more RFPs for groups with 100, 300 or 500 employees in the audit.  We even received a quote request for a city in Missouri with only 39 employees in the audit.”

Whether Public Sector or Private, Dependent Verification is the systematic process of validating the eligibility of each dependent covered by an employer’s benefits plan.  However, here are six things a Public Sector HR Leader should consider before launching public sector dependent audits:

  1. Culture:  You should tailor each dependent verification project to the unique culture of your organization.  Culture will determine the length of the audit, the language of letters, start date and more.
  2. Entitlement:  If your workforce has a sense of entitlement surrounding their benefits, it’s an indicator that your ineligibility rate is likely higher than average.  A dependent audit is often an excellent opportunity to remind public employees that benefits for dependents are not protected by federal law, and should be appreciated.
  3. Charter/Bylaws:  Some public municipalities have charters or bylaws that can support the legitimacy of a dependent verification project.  Courts have repeatedly ruled that public employers can require documentation for dependents enrolled in coverage because it is not prohibited by the city charter or statutes. (see the San Antonio Fire Department’s effort here)
  4. The Win:  Select a message to declare what you will do with the savings from a Dependent Verification project.  90-95% of the employees involved will invest the time to verify all of their dependents, but their attitude toward the project may be improved if they know the savings will go toward a new benefit, the company holiday party, enhanced benefits, etc.
  5. An Advocate:  Identify a respected employee to be the advocate of the project, touting the importance and the collective benefit of participation in the project.  This person should not be a watchdog or a culture-bandit.  The Advocate may be a tenured, well-liked and well-known non-manager.  Note: this does not diminish the need for Executive Sponsorship and promotion.
  6. Outsource vs. In-house:  While not as common as outsourcing, Dependent Verification projects can be conducted internally by HR.  The question is whether the HR team has the bandwidth to manage the project’s communications, the volume of documentation, and resulting questions from employees.  If the decision is made to look at outsourcing, there are many considerations on this subject, well documented here.

Dependent Verification is on the rise in Public Employers.  For more tips and considerations before launching public sector dependent audits, contact us.

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