The dependent audit you skip is the one a carrier eventually runs on its own terms.
Ex-spouses stay on after a divorce nobody reported. Stepchildren stay on after a remarriage ends. A dependent eligibility verification confirms that every spouse and child on your plan meets the plan’s own definition, every record, not a sample, and it runs on your timetable instead of a carrier’s.
The plan document defines eligibility. The audit measures the enrollment against it.
Before anyone asks an employee for paperwork, we read the eligibility language in your plan document and summary plan description, because that is the standard every dependent is measured against.
Spouses
A marriage certificate proves a marriage happened, not that it continues, so we pair it with a recent joint document. Divorce is the common miss, because the employee has no reason to think the plan cares.
Children
A plan that covers children must cover them until age 26, regardless of marriage, student status or residence. The plan’s own definition decides which stepchildren, foster children and children under guardianship qualify, so that is where we look hardest.
Disabled Adult Children
A child past the age limit can stay covered when the plan allows it and the disability is documented. We check that the documentation exists and is current, because an error on one of these dependents is costly either way.
Domestic Partners
Where the plan covers them, the definition and any affidavit have to be applied consistently, and the coverage may be taxed differently. We confirm payroll is set up to match, and your CPA confirms the tax treatment.
Finding an ineligible dependent does not let you cancel coverage retroactively.
Under the ACA, coverage can be rescinded back to a past date only for fraud or intentional misrepresentation of material fact, and only with advance notice. Most removals take effect going forward, which is why how the audit is run decides what you can recover.
Amnesty First
Many employers open a window in which employees can remove ineligible dependents without consequence before documents are due. It clears the easy cases quickly and gives the audit a clearer record of who chose to stay.
Removal Going Forward
A dependent who does not meet the definition is removed prospectively, with a notice that explains why. Where the facts might support fraud or intentional misrepresentation, going further is counsel’s decision, and we assemble the record.
COBRA for Removed Dependents
Some removals trace back to a qualifying event, such as a divorce never reported. That dependent may be owed a COBRA election notice, so we check each case before removal letters go out.
An audit employees understand is one they complete.
Response rates depend on communication more than enforcement. We plan the audit around how employees actually respond to paperwork requests.
Timing
We place the audit away from open enrollment, so employees are not asked for documents and elections in the same weeks, and so removals line up with a clear effective date.
A Short Document List
Employees get a short list of acceptable documents by relationship and a plain explanation of why. Confusion, more than refusal, is what makes documents arrive late, so clarity does more than reminders.
New Enrollees Going Forward
An audit cleans up the past. Requiring the same documents at enrollment and at each life event keeps the problem from rebuilding, which is the step employers most often leave out.
What employers ask before an eligibility audit.
Will employees see this as an accusation?
Not if the message is fairness. Employees who cover only eligible dependents are subsidizing those who do not, and most accept that argument when it is stated plainly and early.
Does it matter if we are fully insured?
The carrier pays the claims, but your renewal is priced on them and your contributions help fund them. The eligibility rules also sit in the policy, and a carrier may enforce them on its own schedule.
How often should we do this?
A full audit when one has never been done, then verification at enrollment and every life event. A repeat audit makes sense after a merger, a system change or a long gap in document collection.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
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