Employee Culture
Knowing Your Employee Culture
We find it important to consider the culture of your company when developing your audit approach. This will ensure your employees can both understand and appreciate the reasoning behind the audit. In cases where employees have some level of understanding as to why the audit is taking place, they are more likely to embrace the process.
For example, if you introduce the audit as a way to confirm each enrolled dependent qualifies for the benefit plans, employees are likely to accept their role in the process. This is not to say that all employees will accept their responsibility to assist but, by including the employees as key players in the company’s attempt to reduce unnecessary spending, this will make the process more acceptable for them.
Culture is also important when deciding upon potential consequences to be imposed for employees who either do not respond to the audit or do not remove ineligible dependents during the Amnesty Phase of the process. You will want to review your company’s history of holding employees responsible for their actions when making this determination.
*We strongly recommend that you discuss any consequences to be imposed in relation to an audit with your legal and ERISA counsel, as appropriate, before beginning an audit.
For example, a company that has a “family” atmosphere, where trusting an employee’s word has been an integral part of the company history, you may not want to impose strong consequences such as fines or disciplinary action, up to and including termination of employment, for an employee who did not comply with the process. Such a strong action would be a monumental shift in the company’s culture from a historical perspective. It may make more sense for such a company to soften the consequences for non response or failure to remove an ineligible dependent in this case.
