Tony Schy August 4, 2010

If you are like a lot of other employers out there, you may be contemplating conducting a dependent eligibility audit sometime in the future. If so, there are 4 things you should consider doing that will help the process run more smoothly.

Provide some advance notice to your enrolled members that a dependent audit will be occuring. Be sure to explain why the audit is being conducted. This can be done during your annual open enrollment process or via another direct communication. Other alternatives include announcing the program via an article in your HR Newsletter or intranet site.
Take a close look at the wording in your SPD to ensure that your definition of an eligible dependent is consistent and auditable. And of course, make sure that is consistent with your company’s intentions. This is especially true if you have multiple plans in force.
Start thinking about timing. While it is certainly not required, it is typically easier to conduct a dependent eligibility audit outside of the open enrollment period. As such, you should consider reverse engineering the timeline. Back up from open enrollment to the date in which you have to pull data for the open enrollment communications. Give yourself at least a month to tidy up loose ends after the verification phase of the audit. The verification phase should be around 60 days. And if you are going to implement a separate amnesty phase, add 30 more days. Finally, back up another 30-60 days to allow for sufficient planning. Then, if you are contemplating using a third party to facilitate the audit, add enough time to hire the vendor and/or go through your procurement process.
Involve your unions. If you have union groups covered under your plan, bring the leadership of the union into your process. The earlier they are involved the better. Having them participate in the planning process or at least keeping in the loop will enable them be an asset to the process.

You can learn more about dependent eligibility audits by visiting The Dependent Audit Guide.