1. Pick a Vendor Based on a Spreadsheet
Most advisers know better. But lesser brokers may believe that all Dependent Audit vendors are the same and attempt to spreadsheet everyone in favor of an easy decision. The client will get what they pay for, and a spreadsheet often influences a decision based solely on price. The lowest cost vendors often have additional hidden fees (postage) or cut corners in security, communications, or service hours.
2. Ignore Warning Signs
If a vendor does not ask about student status or Working Spouse Provisions, they should not sell another Dependent Audit. Countless companies still have dental, vision and life insurance plans with student status requirements for coverage beyond age 18 and Working Spouse Provisions are the fastest growing trend in dependent eligibility. If neither are on your vendor’s radar, watch out.
You also want to avoid companies that make impossible promises like ‘100% participation’ or who lead with a ridiculously low price. (We already covered that you get what you pay for, so keep an eye out.)
3. Let Vendors Run the Demo
A quality salesperson can make any company’s service look attractive with a slick PowerPoint and demo, even with clunky software. In addition to a demonstration, require all vendors to provide sample credentials for both the client and the advisor (you) to explore and play within the software independently.
If your client doesn’t find the platform user-friendly and easy to understand (from both employee and HR perspectives), then you must move along. Your client’s employees are not going to navigate a vendor’s PowerPoint to complete their eligibility requirements; they’re going to use the vendor’s software. So why wouldn’t you require a real, self-guided, demo?
Key things to look for when demoing a vendor platform are clear communication of the correct eligibility rules, ease of document submission, HR reports on demand, customization.
4. Undervalue Reporting Capabilities
Successful Dependent Audits require constant monitoring of the project’s status including the ability to drill down into specific employee details. Of course, the vendor administering the DEV project should be doing the actual work. However, clients want to track progress in real-time and run on-demand reports of employees that are complete, not complete, partially complete, and more.
Most clients use reports at some point to send email reminders or even use the divisional data to engage managers making sure employees are aware of the need to submit documentation.
Note: There is a vendor that does a good job hiding the fact that they do not offer on-demand reports (they only provide them to HR once a week), so beware.
5. Skip References
If a vendor cannot provide you with references within one day, consider that a red flag. Dependent Audits require a high degree of detail, sensitivity, and professionalism to ensure a good experience for both the client and the employees of that client.
There are countless ways for a vendor to ruin a Dependent Audit or under-deliver on promises, so request references and make sure to contact them. Less than 50% of references provided actually receive a reference call.
Bonus: If you have worked for a large brokerage, ask the vendor for names of other advisers in your firm they worked with previously.
6. Forget What Employees Want
You should write every Dependent Audit RFP with the employees of that client in mind. Poor RFPs do not require enough detail on the employee experience during a project. You should know details related to all aspects of their experience during the audit.
Just a few of these details include:
- Employee communication plan
- Flexibility of communications
- Employee language needs
- Methods available to submit documents (employees prefer email and mobile)
- Service hours outside of work
- Incentives to participate
- Clear understanding of precisely what they need to do
The last point is crucial because employees grow concerned about keeping their loved ones covered by insurance. The better the communication, the less stress for everyone involved.
The Bottom Line
‘Well if we’d have known that we wouldn’t have picked them,’ is a sentence no advisor wants to hear from a client. Clients rely on their benefits broker/advisor to vet vendors and help them make the best choice for their organization. It’s important to recognize that Dependent Audit vendors are NOT all created equal. In fact, no two vendors are alike. Thoughtful preparation of the RFP, and evaluation of the vendor responses to that RFP, will reduce the chance of regret over a vendor choice for a Dependent Audit.
For more best practices on RFPs or Dependent Audits, contact DSI.
