Dependent Eligibility Audits

Getting Started with a Dependent Eligibility Audit

With rising health care costs, many employers are looking for ways to reduce expenditures while still providing their employees with the same or improved benefit options. One way to achieve this goal is to complete a dependent eligibility audit. 


Dependent eligibility audits are effective at identifying any enrolled dependents who are not eligible and should, therefore, be removed from the policy. They are usually conducted by an independent firm hired by the employer.


Sometimes employers are concerned that their employees will react negatively to the news that an audit is being performed. Rest assured that there are ways to communicate and administer an audit that will alleviate employee concerns while meeting the fiscal needs of the business.

Here are some dependent audit tips that will help employers begin the process:
  1. Consider a random, sample audit to see if a more thorough audit is warranted. 
  2. Choose a firm and plan the audit with respect and consideration for the employees in mind. Ensure that the firm demonstrates the processes and technology they will use and that they operate in compliance with HIPPA’s Omnibus Rules of 2013.
  3. Approach the audit knowing that on average audits reveal that about five percent of dependents are ineligible. 
  4. Plan far in advance and prepare employees for what’s to come with a schedule of communication materials using various mediums, including email, print and video.
  5. Communicate clearly with employees so they understand that their privacy will be protected and that all records will be kept in strict confidentiality. Also, make it clear that everyone who has an enrolled dependent is included in the audit without exception.
  6. Understand that employees will be required to provided paper documentation of dependent eligibility and that the audit is a much more thorough process than benefit enrollment in terms of verification.
  7. Choose an information collection process that is cost effective and easy for employees, such as a website where documents can be uploaded as opposed to a mail-in method.
  8. Think of the audit as a helpful tool that will reveal areas for improvement in the benefit enrollment process and in how benefit information and requirements are communicated to employees.
  9. Know that audits are best done annually or semi-annually and should not be considered a one-time quick fix to cutting costs.
  10. Remain confident that the organization and its employees will benefit from the cost savings produced by the audit.
This article is intended to provide accurate and authoritative information on the subject matter covered. It is distributed with the understanding that FBMC is not rendering professional or medical advice and assumes no liability in connection with its use.

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