Submitted by: Marlon Richardson, Association Account Manager, My Benefit Advisor

Employee Benefits Savings: Consider a Dependent Eligibility Audit

Most employers are continually looking for ways to reduce unnecessary expenses within their health care budget.  Increasingly, employers today are turning to a dependent eligibility audit as one such method.  In many employer-sponsored benefit programs, the inclusion of ineligible dependents not only increases unnecessary premium expenses but can also result in a financially stressful claim denial.  Although an audit is typically viewed as a cost control measure, it is also a fiduciary responsibility of the employer, according to IRS regulations.

Through the process of a dependent eligibility audit, the employer purges from the benefits roster anyone who does not or no longer qualifies for benefits.  Typically, these situations might involve a divorced spouse, adult children who age-out of eligibility or a distant relative living with the employee.  In most cases, these dependents might remain on the roster accidentally, but occasionally can be the result of deliberate fraud.

Audit savings can be substantial, as many first-time audits find that 10% or more of dependents do not meet eligibility criteria.

The My Benefit Advisor program, available to all members of the Chamber of Commerce for Greater Philadelphia, provides all individuals and employer groups access to their extensive portfolio of insurance and human resource products, services, and guidance.  For more information, visit MBA online at ccgp.mybenefitadvisor.com or contact Marlon Richardson at (215) 790-3640.