Dependent Verification

[Guest Ellymae]

My company just recently had a visit from a vendor who reported that approximately 20% of covered dependents on health insurance are not valid dependents. At an average of $1500 claims payout per dependent per year, even if their estimate is very high could result in some serious savings. We have decided that we will probably go forward with dependent verification. Our first thought of course is birth certificates and marriage licenses. Someone mentioned page one of the tax return, but then again that has personal financial information on it as well. Not to mention, it could be altered as well. Anyone out there do dependent verification, or have any further ideas of implementing this? Thanks for any info!

Ellymae

[Guest Benefit Audit Consultant]

Ellymae,

The percentage that the vendor gave you is extremely high. My company performs dependent audits for many Fortune 500 companies. We have seen ineligible dependent drop rates from 6% to 18%. The normal range for most is between 8% and 12%. However, we have never had a client not have a Return on Investment of at least 400% including our fee.

The tax return is key because it indicates whether a couple is still married, and whether an individual still resides with the parent in most cases.

Some companies can conduct these audits on their own. Make sure you have thought through the security issues with the documents, the reality of a large amount of incoming calls, and a solid communication plan. We have seen unprecedented growth in these audits over the last 14 months. Let me know if you have any other questions.

Michael

[GBurns]

Marriage certificate, birth certificates, guardianship papers, sworn affidavit are what I see, but tax return ?

Is there a law that allows an employer to ask to see an employee's tax return ?

What do you do if the employee refuses to show tax returns claiming privacy laws ?

[QDROphile]

How about education and the big stick?

The enrollment form and other communications such as the SPD should emphasize the importance of correct designation and consequences of incorrect designation, including recoupment, criminal charges and discipline (including termination of enployment). In the event of questions, someone should be availabe to assist employees with the correct determination. This is sometimes complicated, after all.

[Guest angryemployee]

I think its total subversion of my privacy to have to provide things like my tax returns to a 3rd party that I have no legal recourse with...

A birth certificate should suffice for any child under the age of 18.

I currently am not married, but live with my childs mother, and she claims her on her taxes. But I carry the health insurance.

So not only are they asking for my tax return, but they want my child's mother's tax return as well.... That’s right someone that has NO AFFILIATION with my employer has to provide her tax return to this 3rd party...

Guys this is just going tooooo far... I have a right to protect my personal information, including not disclosing it to 3rd parties for auditing reasons.

If they think I have ineligible dependants, they should hire a PI, and file a lawsuit against me.

Instead of calling me a liar and making me prove that I am not.

[masteff]

You opened the door into your private lives when you claimed her as a dependent. Do what you need to prove she's eligible for coverage. If they say she's not eligible, then find out what you have to do so she can be covered and do it. This is about your daughter and not about you or your girlfriend.

[oriecat]

And if you do have to provide a tax return, I don't see any reason why all of the dollar figures couldn't be blacked out and so you are just showing the SSNs of the dependents. They don't need to see income or taxes paid, so hide that info.