Trust, but verify. Once viewed as too intrusive or a low priority, dependent eligibility audits have gained momentum as employers realize that the benefits and savings from these audits far outweigh inaction or potential employee pushback. Conducting these types of audits can also reduce compliance risk under ERISA and DOL guidelines. With increasing forms of self-service online enrollment, lack eligibility vendor controls, and some plans even excluding spouses from dependent eligibility for coverage, the number of ineligible dependents for any given organization can range between 2-10%.

The type of dependent eligibility audit and the processes used may vary greatly from one vendor to the next. For the most part, many vendors will plan the audit closely with the employer’s human resources personnel. This time period allowed for audit planning and how much time an employee may have to comply with the audit’s request may vary depending on each vendor’s methodologies. At the end of a planning phase both parties usually come to an agreement on the audit’s timeline, communications and objectives. The vendor or employer often decide to announce the audit and its purpose to employees prior to implementation.

Typically an audit is conducted via mail and/or email. Employees and their dependents are sent forms and letters indicating which dependents they have enrolled and what documentation is needed by the vendor to verify each dependent’s eligibility. Some vendors may provide a Call Center and website to assist audit participants with the process. At the audit’s conclusion the employer will receive a list of dependents who did not meet the audit’s eligibility requirements established at the audit’s onset.

Dependent eligibility audits, sometimes also referred to as a dependent audit, verification audit, or dependent verification audit, typically involve hiring an outside vendor to verify the eligibility of all enrolled dependents in the company’s health plans.

Many organizations don’t realize that conducting a dependent eligibility audit internally will be a significant undertaking. At a minimum it will require the organization to:

Hiring an outside vendor provides a buffer between human resources personnel and employees to ensure objectivity while also minimizing conflict. An experienced and knowledgeable dependent eligibility audit vendor may also compare the language of multiple plans against each other and current administrative procedures to identify and report potential discrepancies. At the conclusion of the audit the entire organization has a much better understanding of eligibility verification requirements in order to maintain dependent eligibility going forward.

Due to their popularity the market has been flooded with a variety of companies who conduct dependent eligibility audits in similar yet very different ways from one another. It is important that organizations do their homework before engaging with any vendor. A few key considerations or questions to ask:

“ The team was great to work with and reporting was very thorough. ”

- Director of Benefits [Assisted Living Provider]

“ Outstanding handling of our dependent audit, Service was excellent, thorough, thoughtful, timely and insightful! ”

- Director of Benefits [Retail]

“ Audit was well organized, communicated and executed. Team was always quick to respond, send documents and answer questions in our effort to wrap it up. ”

- Treasury Manager [Manufacturing]

“ Audit results were very well organized and presented in an easy-to-understand format. ”

- Benefits Supervisor [Construction]

“ Everyone was very professional, informative and knowledgeable. They were always on top of things. ”

- Chief HR Officer [Private Equity Firm]

“ I would like to add how pleased we are with the services that BMI provided and the outcome of the audit. The folks on your team have been thorough, extremely responsive and helpful every step of the way. ”

- Vice President, Human Resources [Manufacturing]

“ I could not have asked for any better customer service during the audit. I was able to reach out and get a response in a very short amount of time. The professionalism of the Project Management team made this process very fluent. ”

- Human Resources Manager [Manufacturing]

“ The team at BMI was great to work with, knowledgeable and flexible. Great experience!! ”

- Human Resources Director [City Government]

“ I was totally impressed with the professionalism of your team, communication was over the top from the very beginning until the end. ”

- Benefits Specialist [Skilled Nursing and Rehab Center]