To Amnesty or Not to Amnesty, that is the question…

Well, at least it is one of the questions that many employers ask when contemplating a dependent eligibility audit.  While you can certainly make a compelling case in either direction, here are a few things to consider [Follow this link for a primer on how an Amnesty program fits in to an audit]:
• A dependent eligibility audit is invasive.  An Amnesty phase to your audit is one method to “ease” into the process.  If effectively communicated, it conveys the message that you are not “out to get” employees or are trying to maximize the number of people being eliminated from your plan.
• If you heavily communicated the importance of understanding eligibility definitions during your recent open enrollment, an Amnesty phase may be less beneficial.
• If you conducted an active re-enrollment recently, an Amnesty phase may be less effective.
• An Amnesty phase does not add (nor does eliminating it save) a large portion of the overall costs.  The largest expense will be the procurement, printing and postage of an outbound mailer.  The volume of responses and inquires will be relatively modest (assuming you make the response to the Amnesty phase optional.)
• With an Amnesty phase, you may get better overall results.  There are a small percentage of people that once they realize they are covering an ineligible dependent (either accidentally or intentionally) will be fearful of repercussion.  They will take advantage of the Amnesty phases “get out of jail free card,” but they may be leery of confessing otherwise.  Their dependents will still get removed from the plan but they may end up requiring you to drop them from the plan rather than the employee voluntarily dropping them.
• The corollary to the prior point is that audits without an Amnesty typically have a higher non-response rate at the end of the project.  And since most employers would prefer a high response rate, a separate Amnesty phase is one strategy to achieve this objective.
• A distinct Amnesty phase will add to your overall timeline.  Typically, the phase is around 30 days.  With additional planning time, you could expect it to add 45 days to the project timeline.