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The 3 Biggest Fears of Summer Dependent Audits

Every April and May, consultants ask the same question: "My client wants to do a Dependent Audit, but they aren't sure if they should wait. What are the pros and cons of a Summer Dependent Audit?"

The 3 Biggest Fears of Summer Dependent Audits

At DSI, we've conducted hundreds of audits over the last decade and have extensive data to support an audit over the Summer. Here are our top three:

Fear #1 - People leave home in the Summer and won't know about the audit. 

The average vacation taken by employees is only four days, and in the Summer, the average is higher at one week, or 7-8 days. A well-planned Dependent Audit requires a month for document collection and two additional weeks for a grace period. In extreme cases, an employee might be gone for two weeks out of the six audit weeks, leaving ample time to comply and submit documents. 

Additionally, employee response rates to Summer Dependent Audits are virtually identical to every other month of the year (96%-98%).  


Fear #2 - Human Resources deserves a vacation too, and they cannot do an audit if someone in HR is out.

A properly planned and executed Dependent Audit relies very little on HR. Most DSI audits require less than ten total hours of investment by the client, most of which occur in the first two weeks, or the final two weeks, of a 12-week project. A Human Resources department should feel comfortable allowing vacations during a Dependent Audit. If they don't feel comfortable, they've clearly chosen the wrong vendor with which to partner.


Fear #3 - There won't be enough savings to merit a Summer audit, so we'll wait until the new plan year.

Every CFO of a company with a self-funded medical plan has strong feelings about waiting to implement a Dependent Audit. But the average Dependent Audit has 800%+ Return on Investment, and every day/week/month that passes with ineligible dependents in the health plan is potential waste and unnecessary expense. The average dependent in a self-funded plan costs employers over $2,200 per child and $5,600 per adult, with every ineligible dependent posing a potential threat as a stop-loss trigger. Delaying a Dependent Audit 6-8 months until after OE or the new plan year starts is risky and contradicts saving money.

Some brokers, consultants, and HR leaders have misgivings about Summer Dependent Audits. Still, a decade-plus of data has shown that Summer audits are just as effective and valuable as any other season. To save the most money and ensure your plan is free of ineligible dependents, the best time to audit is always "now."

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