If saving money is important to your organization (i.e., if your organization exists), chances are you've conducted - or at least considered conducting - a dependent eligibility audit for your health plan.
Estimates for the percentage of ineligible dependents detected in such audits go up to 20 percent. And with the cost of each dependent covered under a health plan averaging about $3,500 annually, there's potential for a significant return on investment.
Not only can dependent audits help you hold down your costs; if you're self-insured, they can help you fulfill your fiduciary duty to administer your plan properly, which means that only eligible dependents should receive benefits.
As obvious as those advantages might be to you as a benefits professional, your employees may have a harder time seeing dependent audits in a positive light. To employees, it can feel like their employer is just trying to kick some people off of the plan, or their employer doesn't trust them to be honest about their dependent situation.
To avoid any misplaced anxiety or resentment from your workforce, follow these five tips for making employees more comfortable with dependent audits:
1. Communicate early and often.
Since dependent audits rely heavily on employee cooperation, you need to allow ample time to let employees know what's coming - especially if you're doing it for the first time.
Once you've established a deadline for submitting necessary documentation (e.g., birth certificates), develop a multi-touch, multimedia communication plan to educate employees and prepare them for the audit. Weekly emails, starting several weeks out from the deadline, combined with posters around the office and an online video, can help you maximize employee awareness and understanding of the audit - and minimize confusion and misconception.
2. Clearly define eligibility.
Most employees who add or maintain ineligible dependents do so unwittingly. There's simply a lack of understanding of what actually constitutes an eligible dependent.
So before you conduct a dependent audit, you should spell out in plain language your plan's eligibility requirements. Rather than just directing employees to their plan documents and making them decipher the terms and conditions, give them a way to easily understand the criteria they must consider with respect to their health plan dependents. This is where the previously mentioned online video can be extremely helpful.
With video, you can present the eligibility requirements in layman's terms and walk through common example scenarios, giving employees a quick, easy and engaging way to identify the eligibility status of their dependents.
3. Emphasize personal impact.
Be straight with employees. If the company continues to pay for ineligible dependents, those that are eligible could suffer. You may have to raise employee premiums or adjust plan design to shift more out-of-pocket costs onto employees. Audits are not only good for the company, but for all employees who are paying to cover themselves and their family members.
You should also be explicit about the penalty for not cooperating with the audit (typically removing the offending employee's dependent(s) from coverage). Of course, you don't want to sound threatening, so make sure to frame your message in a way that helps employees understand that cooperating with the audit is simply the right thing to do - for themselves, their families and their fellow employees.
4. Highlight opportunities for reinvestment.
Dependent audits can be an excellent way to free up money that you can invest back into your employees. If that's part of your plan, make sure employees know it!
Whether you use the savings to raise wages, upgrade employee work spaces and equipment, or offer great new perks and benefits, your employees are much more likely to feel positive about the audit if they know there's something exciting in it for them.
5. Make cooperation convenient.
Let's face it. If something sounds like it's going to be a hassle, we're not exactly fired up for it. And it's a safe bet that the prospect of tracking down documentation and turning it in on time sounds very much like a hassle to your employees.
But, if you can assure them that the process will be as painless as possible requiring minimal effort on their part, your employees will feel a lot less apprehensive towards an impending audit.
One way to simplify the process is to run the audit through your benefits management technology vendor. Using the technology and people that are already familiar with your company's benefits program, you can ensure a more seamless experience for your employees - and you make it easier to act on the results of the audit.
And, if your benefits technology is designed from a mobile-first perspective, you can allow your employees to submit their verification documents via their smartphones. They snap a photo of the document, upload it to your benefits management system, and they're done!
Let your employees know that cooperating with the dependent audit is as easy as sharing a photo on social media, and you may just find yourself with all the documentation you need weeks before the deadline!
Example Email Announcing Dependent Audit
Using the tips discussed above, here's an example of an email template you could use to personally communicate to your employees about an upcoming dependent audit:
Subject Line: Lower your health insurance premium
Care to put some money back into your paycheck each month?
In an effort to keep our group health plan running as efficiently and affordably as possible for everyone, we'll be conducting a dependent eligibility audit <INSERT DATES>.
This audit will ensure that you aren't paying any more than necessary for your health insurance, and will ultimately allow us to provide you <INSERT NEW PERK OR BENEFIT>!
We'll need your help, but it'll be a piece of cake.
Once you're contacted to verify your dependents, all you have to do is:
- Gather any documents necessary to verify your dependents (marriage license, birth certificate, etc.)
- Take a photo of each document with your mobile device (if you don't have a mobile device, you can scan them to your computer)
- Upload to <INSERT DOCUMENT DESTINATION>
- And get ready to enjoy <INSERT NEW PERK OR BENEFIT>!
Thank you in advance for helping us continue to make <INSERT COMPANY NAME> a great place to work.
Need clarification on our health plan's dependent eligibility rules? Check out this quick video <insert hyperlink to online video>!
Find more resources to engage and educate your employees in this free open enrollment communications kit.