Dependent Eligibility Audits

Why Perform a Dependent Eligibility Audit?

MedReview’s Dependent Eligibility Audit

A plan sponsor spends an average of $3,000 to $5,000 per dependent enrolled in its benefit plan. The Wall Street Journal recently estimated that 10% to 15% of enrolled dependents do not qualify for coverage. While each company determines who is eligible for coverage under its health plan, mistakes happen with regularity. A Dependent Eligibility Audit will audit plan participation to ensure that only eligible dependents are provided coverage on your health plan. Our average Dependent Eligibility Audits determine that 6% of all dependents on your company health plan are ineligible. The lowest result we have found is 4% and the highest result we have found is 16%.

A Dependent Eligibility Audit will audit plan participation to ensure that only eligible dependents are provided coverage on your health plan.

Sarbanes-Oxley Compliance:
Public companies must have financial controls in place. Failure to implement effective controls that prevent enrollment of ineligible dependents may create a Sarbanes-Oxley exposure.

Exclusive Benefit Rule for Fiduciaries:
Having ineligible dependents on your health plan violates the ERISA mandate requiring health plan dollars to be spent only in the interest of eligible plan participants and beneficiaries. There may be personal liability exposure for a benefit plan custodian who knowingly pays claims for ineligible dependents and/or fails to have procedures in place in order to insure maximum accuracy.

The MedReview Dependent Eligibility Audit provides the plan sponsor with legal documentation that insures all dependents are qualified to participate in the plan. It requires that employees submit legal documentation proving that each dependent they have enrolled in the plan is qualified to participate.