The Dependent Audit for Employee Health Insurance - You'd better

The Dependent Audit for Employee Health Insurance - You'd better Play Along

You know the distinct feeling you get when you see a letter from the IRS, a letter calling you to jury duty or a bill collector's notice in the mail. Well, here's a new one to dread - an audit from your employer, when they want to know if all the people you include in your health insurance are really your dependents. They'll ask you to provide proof that all of them really are allowable dependents; if your proof comes up short, those members of your family can no longer claim a place in your employee health insurance.

When the powers that be come up with annoying new rules and regulations for us to comply with, we often think of just ignoring them for a while. We can't believe that this new rule should suddenly come and change our lives. It's just that healthcare costs have been rising regularly every year, and employers want to find a way out of it. If they could possibly have an audit cut even a couple of people out of their employee health insurance costs each time that would be great for them. Typically, a company with 10,000 employees will usually find about a couple of hundred people to take out of the plan. At about $2500 a head, the employer goes and saves a half-million dollars. You know how mean those health insurance types can be. They'll cut you off in the middle of surgery if they possibly could. So make sure that when your employer comes up with this demand, that you run about to get the papers that are necessary, on the double.

Not that these dependent audits are new. They've been around ever since the late 90s; but ever since insurance costs started to go through the roof, employers have actually started making use of this little weapon they have in their bag of mean tricks.Two thirds of all companies will be doing that this year to save on employee health insurance costs. To most people, this is nothing more than a minor headache; they do have all they need to prove that every person claiming employee health insurance under the name is actually eligible. But to some people, they will find one or two family members suddenly ineligible; and they will be forced to pay for insurance that could cost thousands of dollars a year. Not only that, the employer will then demand that he be compensated for all he spent covering those ineligible members.

And this is how things have degenerated since the times when your employer just asked you to sign an affidavit that all your dependents were really eligible. Now you have to prove that your wife is your wife, get a marriage certificate, a birth certificate and so on. Most often, employees find that their children who are18 are the ones that get dropped (although starting this fall, that limit will be raised to age 26). There are other potential stumbling blocks as well. If for instance you have a father who is eligible for Medicare, your employer will refuse to cover your father. If your wife has insurance with her job, your employer will refuse to extend employee health insurance to her. They'll ask you to provide proof in the dependent audit of all of this.

If you come clean as soon as possible, it is possible that you will be forgiven, and not asked to pay back costs. And of course, if you delay with their request for proof for the audit, they'll drop the whole lot of you.