Wednesday, August 22, 2012

More Than 10% of the Folks on Your Health Plan Are Fraudulent

Dependent eligibility audits are designed to ensure that every employee family member who receives health coverage is actually eligible for that coverage. Every employee, from CEO to chief surgeon to janitor, must show copies of their marriage certificates, their children’s birth certificates, and perhaps even the first page of their most recent tax returns, with numerical amounts blacked out, to demonstrate that they are currently married and are legally the parents of any children they claim as dependents on the health plan.

A typical dependent eligibility audit finds that between 6 and 16 percent of dependents are ineligible for the company health plan.     

The list of ineligible covered persons might include: 

  • employee children who are older than 26;
  • kids who aren’t legally an employee’s child; 
  • a domestic partner’s child; or
  • grandchildren.  

Audits also find that:

  • employees haven’t really married; or
  • people were married and divorced without telling human resoruces.   

For smaller companies with less than 1,000 employees, the human resources executive may handle a dependency eligibility audit, simply by making a list of employees with dependents on the company plan, asking for supporting documents, and checking them off as employees produce them. 

For an easier alternative, some firms simply ask employees for an affidavit stating that their dependents are legally theirs. But certification isn’t terribly effective as a willingness to lie may not be dissuaded.

Link to full text