To audit or not to audit, that is the question

[dseals]

We have a plan that is hovering around audit size. At 12/31/12 the plan had 115 participants, so it fell just under the first year audit size for 2013. On 1/1/13 the participant count grew to 160, but the question is, how do we base our count?

The plan has no hours or service requirement and entry is on the date of hire. Since this is a health care placement group, we have many employees who work as fill-ins and are hired for a week or so, here and there, during the year. The problem is that if an employee became a participant and terminated during 2011, didn't work at all in 2012, then was hired to fill in for a week in November-2013, the program is counting that participant as a body on 1/1/13.

I haven't been able to find any document that discusses how to handle rehires in this situation. Should the beginning of the year participant count be inflated for these "participants," even though they didn't physically get rehired until later in the year?

[BG5150]

It doesn't make sense to include someone BOY if they are (re)hired sometime later. I would make sure your census data is correct in the program. If there was no termination date entered, maybe the program thinks the person was still "employed" on 1/1.

[dseals]

The hire/rehire dates are all entered correctly but the program just sees that a participant has returned, assigns the original participation date, and declares they were in at BOY.

So, what we now have is @ 50 participants who terminated in a prior year(s), then returned at some point during 2013 (none of them returned on 1-1-13), and the program throws them back into the BOY count based on the prior DOP.

[Flyboyjohn]

Forget about what your "program" is telling you, here's a simple approach for your situation:

1. Determine the number of active employees on 1/1/2013 (anybody not actively working on that snapshot date can't defer so can't be an "active participant")

2. Add the number of folks who had a balance in the plan on 1/1/2013 and aren't included in #1

3. If the total is 120 or less you don't need an audit for 2013

[BG5150]

And then send a support ticket to the program vendor to see why it's calculating that way.

[masteff]

Does the plan document address breaks in service? My gut reaction is that where the person had a 12-month break then they should not be counted until their return date, but I could be applying my personal experience with a plan that had a definite break in service rule. That might also be something to check in your program, whether you're missing a setting for a break in service rule.