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Proving Dependent Status for Benefits Coverage

Something I've heard a fair amount about lately is the policy of some employers to require proof that an employee's spouse/child is really a dependent before he/she can be added to benefits plans.  In addition, some employers are going a step further to conduct audits of plans in their entirety and require participants to dig out social security cards, marriage certificates, etc. in order to prove dependent status for participation in health plans.  

According to this article, audits are conducted in a variety of ways.

• Some companies start with an amnesty program, permitting workers to quietly remove those who don't belong on the plan.
• The employers will take step of requiring workers to submit proof of eligibility before family members can remain on the plan.
• Some audits have all workers fill out a questionnaire about dependents but only later collect documentation from a random sample.

Here's the kicker:

5 percent to 10 percent of dependents will come off the rolls after an audit, including those dropped because workers didn't submit the paperwork. Some companies with more generous benefits plans have seen 20 percent of dependents dropped.

All you have to do is "do the math" on this one and it's obvious why employers would do audits.

Full post as published by Strategic HR Lawyer on October 22, 2007 (boomark / email).