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. Spousal verification is a core step in any dependent eligibility audit. To find when a child ages out of the plan, use our dependent age 26 calculator. Estimate what ineligible dependents cost with our dependent audit savings calculator.
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. Definitions drive the audit.
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. Consistent definitions protect a domestic partner eligibility policy.
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Under the ACA, coverage can be rescinded back to a past date only for fraud or intentional misrepresentation of material fact, and only with advance notice.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. An amnesty period is a common first step in a dependent eligibility audit.
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. Prospective removal keeps the audit consistent with the ACA rescission rules.
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. Checking COBRA rights first keeps a dependent audit from creating a new compliance problem.
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. Good timing raises response rates in a dependent eligibility verification.
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. A clear document list is the simplest way to speed up a dependent audit.
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. Ongoing verification at enrollment keeps the audit’s results from fading.
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. Framing a dependent eligibility audit around fairness helps employees accept it.
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. Eligibility audits help fully insured plans too.
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. Regular dependent eligibility verification keeps the plan clean between audits.
Also in Compliance & Oversight
Related guides.
Domestic Partner and Same-Sex Spouse Coverage
How the tax and plan rules differ.
Medical Child Support Orders and Divorce
What a plan must do and by when.
Spousal Surcharges and Carve-Outs
When they save money and when they backfire.
Where the Rules Come From.
The laws and rules named on this page link to the statute or regulation they come from. This is general information, not legal or tax advice, and rules change, so check the current text.
COBRA Continuation Coverage (29 U.S.C. 1161)
Requires many group health plans to offer temporary continuation coverage after a qualifying event.
Affordable Care Act (Public Law 111-148)
The 2010 health reform law, with later amendments, behind employer coverage, reporting and market rules.
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.
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