Statistics have shown that companies today are providing coverage to as many as 15% of their dependent population who are found to be ineligible for various reasons. Depending on how much an organization contributes towards the dependent premium, an Eligibility Verification audit (EVS) can generate net plan savings of 3% – 8% of plan expenses. Not only will an audit result in tremendous savings, but organizations that perform dependent eligibility audits are also complying with:
- The ERISA exclusive benefit rule for fiduciaries whereby corporate officers and senior management can be held personally liable. They are obligated to run the plan in the best interest of participants and eligible beneficiaries, for the exclusive purpose of providing benefits and paying plan expenses.
- Sarbanes-Oxley when expenses associated for ineligible dependents resulting from the absence of effective controls create non-compliance exposure.