Why Perform a Dependent Eligibility Audit?

A Dependent Eligibility Audit manages risk going forward

Definition of “standard family” has changed drastically

• Increased complexity and regulations have made this a difficult issue for Human Resources
• Does your SPD clearly define rules for this level of complexity?
• Do you know when an employee gets a divorce?
• Do your employees step children meet your plan’s requirements?

Most employers are under the impression that their TPA/Carrier is verifying plan member eligibility for them; therefore they do not verify the dependents that employees add to the plan.

Plan Sponsors need to enforce their rules

• The exposure of having ineligible participants on the plan can represent a Sarbanes-Oxley risk to public companies and/or personal liability exposure to the Plan Fiduciary under ERISA and the Exclusive Benefit Rule.
• If an ineligible participant has a claim, that claim must be denied.
• Ineligible plan participants increase the cost for all plan participants