100% Participation In Dependent Audits Requires “Out of This World” Thinking

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Dependent audits represent an interesting proposition for employers.  On the one hand, HR (benefits) and Finance are eager to “pull back the curtain” to see what savings can be achieved by cleaning up dependent rolls.  On the other hand, the notion of exposing employees to an audit can be daunting.  It’s perceived as highly intrusive, even insulting, by some employees.  Past practices tend to influence future thinking.  “We can’t even get our people to enroll on time,” is a how the conversation usually starts.  “How in the world would we get them to show us they were married 20 years ago!”

Then along came a little piece of legislation known as health care reform.  With the onset of PPACA, employers are now covering dependents longer.  Thus, we’re finding more employers opting to audit in the short-term as a way of tightening up eligibility and enrollment practices and policies for the long-term.  It makes sense.  If you have to cover dependents longer, might was well do what you can to make sure they are truly eligible for coverage.

But if you audit, will they participate?  The answer is yes, but it requires the right perspective.  What follows is one example of how our client shattered perceptions by conducting an audit that resulted in 100% employee participation.

MOL America, Inc. is a transportation and logistics company headquartered in New Jersey with field employees sprinkled around the country.  The company covers approximately 300 employees and 650 dependents under its benefits plans.  MOL selected Vantagen to serve as its independent third party dependent auditor.  Audit planning began in March 2011.  Audit communications were set to begin in late April with full completion anticipated by early August.

The MOL America audit featured an amnesty period where dependent eligibility definitions were clearly reinforced and employees were provided an opportunity to drop ineligible dependents.  That phase was followed by the Primary Verification Period, the main documentation collection period, as well as Secondary Verification Period whereby targeted communications were issued to employees based on their participation (or lack thereof).  Once these phases were complete and the client signed off on the projected drop scenario, termination notices were issued that afforded the impacted employees with the option of appealing the action.

The audit wrapped just ahead of the original August target.  By the audit’s conclusion, it achieved 100% employee participation and a 3% reduction in covered dependents.

Success Factors:
They can be boiled down to three:

With the right strategy and the right amount of involvement, employers can sanction dependent audits that can shatter upfront, current world perceptions and achieve optimal participation.  The auditor can handle the heavy lifting when it comes to calls, document processing and communication, however it’s the employer’s contributions that can help push participation from OK to exceptional.