In our discussions trying to land a large regional beverage distribution company of approximately 350 employees, it became very clear that the human resource staff was overwhelmed and couldn’t properly execute many aspects of their job responsibilities. They needed help but management would not allow any additional staffing. Their concern was that important and necessary processes were not being executed or completed in necessary timeframes and needed a strategy to relieve the pressure quickly.
The easy answer for this group was the implementation of a benefits administration system. Although there are many such systems available to choose from, the proper fit for this group was our own proprietary system, which had several features that allowed for greater efficiencies, such as consolidated billing, carrier bill reconciliation, employee self-serve, automatic COBRA processing, enhanced HR reporting tools, etc.
We picked up the broker of record for this group and immediately implemented the benefit administration system. Although the system overall was a great success and succeeded in reducing the workload on the HR staff, the substantial benefit obtained from its implementation turned out to be derived from the initial eligibility audit. When a new group is enrolled in the system, a very thorough audit is performed to match up employee and dependent eligibility with insurance carrier records. This initial audit produced a mismatch on 53 employee records. These mismatches included over 20 employees and/or dependents that should have been terminated on insurance programs many months prior and several employees who should have had coverage that didn’t.
This audit immediately saved the company $26,000 per month with an additional $52,000 in retroactive credits that we were able to obtain for the company. Most importantly, however, the company escaped the possibility of claims totaling tens if not hundreds of thousands of dollars in potential exposure due to employees and/or dependents not enrolled in expected coverage.
Eligibility audits are a great way to reduce your exposure to claims arising from inaccurate employee and dependent coverage in your various benefit plans and can be done with or without the implementation of a benefit administration system. To help guard against this risk, contact us now.