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| What is a Dependent Eligibility Verification Audit (Dependent Audit)? |
A Dependent Eligibility Verification Audit (Dependent Audit) is the inspection of an employer's health & welfare plan dependent's status to ensure eligibility. A Dependent Audit's goal typically is related to one or more of the following objectives:
- Reducing healthcare costs by eliminating claims paid for ineligible dependents
- Provide controls in support of Sarbanes-Oxley compliance
- Comply with ERISA or state-laws related to operating a benefit plan as designed and for the exclusive benefit of plan participants, as well as operating the plan in accordance with a "prudent man standard"
- Ensure that the organization is able to continue providing appealing benefits that help attract human talent.
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| It is important to note that the goal of a Dependent Audit is NOT to maximize the number of dependents that are removed from benefit plans. |
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| Why should we perform a Dependent Eligibility Audit? |
Control Wasteful Spending:
Dependent Audits often find that between 5% and 12% of plan participants had an ineligible dependent on a company health plan. These ineligible dependents are increasing your company's and your plan participant’s health care costs.
Comply with the Law:
The Employee Retirement Income Security Act (ERISA) mandates that plans sponsors manage plans for the exclusive benefit of participants and beneficiaires. Checking for ineligible dependents helps to ensure that your organization is meeting its fiduciary obligations. This also provides another internal control that helps your company comply with Sarbanes-Oxley. |
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| Reduce Future Costs |
Regular dependent eligibility audits show your plan participant that your organization is doing its best to minimize the costs of their health insurance. Auditing will also help stem future abuses of the eligibility provisions in your plan.
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| Benefits of a Dependent Audit |
Employers have experienced up to 10% reduction in healthcare participants by using this service with a usual range of 2% to 8%. A reduction of 1 % to 1 % of enrolled dependents, which is 1 out of every 200 to 400 enrolled dependents, will typically cover the costs of our program. Returns on investment generally range from 400% to over 1000.
This verification will:
- Contribute immediately to a reduction in healthcare costs that are comprehensive and innovative;
- Verify that dependents claimed by your plan participants are eligible to receive healthcare benefits;
- Produce results that are quantifiable and measurable;
- Provide immediate savings throughout your entire benefit structure, including medical, dental, prescription drug, and vision plans; and
- Complement your existing efforts of containing healthcare costs.
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