As you begin planning your next annual open enrollment, you may be reflecting on last year’s enrollment and strategizing ways to improve. You may be asking yourself questions like, “How can we streamline the enrollment process?”, “Is our benefits package sufficient to retain our most valuable employees?”, or “How can we save money on benefits yet still give employees a rich benefits package?”
Have you considered incorporating a dependent eligibility audit to help control your healthcare costs? Conducting a dependent audit can be inexpensive, quick, and simple with minimal resources required from your company. We’ve outlined four reasons you should consider adding dependent eligibility verification to your annual compliance process.
1. You’ll save on healthcare costs.
On average, 4-8% of dependents enrolled in employer benefit plans are ineligible. The average cost for each ineligible dependent is between $3,000-$4,500 per year, depending on how generous your benefit offerings are. A company with just ten ineligible dependents could save $30,000 -$45,000 per year in unnecessary claims expenses. Try our Dependent Verification Savings Calculator to see how much you could save.
In fact, a recent manufacturing client discovered that 11.1% of their covered dependents were ineligible for benefits. After removing those ineligible dependents, the client saved approximately $871,500 per year! To learn more, read the Manufacturing Client Case Study.
2. Your employees will learn your plan’s eligibility rules.
Benefits can be complicated. Many employees who have enrolled ineligible dependents may simply be unaware of your plan’s eligibility requirements. After years of taking care of a dependent, such as a grandchild, niece, or nephew, employees may consider them as their “children” without even thinking about it. Dependent eligibility audits are a great way to help educate employees about your plan’s rules.
Preparing your employees for a dependent eligibility verification doesn’t have to be difficult. A few methods we use to help our clients educate their employee population include mailers, posters, table tents, infographics, and emails.
When communicating with employees about plan rules, try to avoid benefits jargon and use examples wherever possible. Keep in mind that your employees likely only review benefits information once a year, so it can be challenging for them to comprehend all the rules and requirements.
→ Free Webinar: 5 Reasons You Need to Launch a Dependent Eligibility Verification this Year [WATCH NOW]
3. Dependent eligibility verifications help you maintain current employee demographic data.
You will be happy to know that a dependent eligibility audit does more than audit dependent eligibility. Here are just a few of the added bonuses:
- Dependents’ dates of birth are validated, which helps ensure claims are paid correctly and on time.
- Employee addresses are updated and reported back to you.
- Dependents who have aged out are identified and removed from the plan prior to the audit.
Having this updated demographic information can be very advantageous, especially if part of your open enrollment communication strategy includes sending traditional mailers.
4. You’ll learn which method of communication can help you best reach your employees.
Have you ever wondered how tech-savvy your employee population is? We provide each of our dependent audit clients with a summary of how their employees submitted documents (web, mobile, mail, fax). These data points can help you in other areas of your business when employee communication is necessary.
What’s keeping you from conducting a dependent eligibility verification? Let us know in the comments! 👇 👇