Employee benefit plans can be easily subjected to fraud or other forms of mismanagement and a good benefits plan audit can help employers minimize this risk while ensuring a sustainable benefit plan.

Look further than the numbers

A solid analysis goes beyond simply identifying the claims usage versus premiums on a plan year-over-year. It looks to understand the duties of the employees, how they are paid, and the purpose and role of offering benefits. A benefits audit also seeks to understand how all of these align for overall job satisfaction. This will be the first indicator of whether the coverage options meet with the expectation of the participants.

Make sure taxes are done properly

If not calculated correctly, they could create unnecessary, unintended financial burden for your organization. Without a benefits plan audit and the subsequent conversation to follow, an employer could set up a disability program that is unintentionally taxable. A benefits plan audit can discover the financial error before any disability claims are made and finds out the benefit is taxable.

Keep an eye out for anomalies

By following plan performance over the length of time a client is with you – however long that is (perhaps decades) a benefits audit can identify fraudulent activity. Monitoring and keeping track of behaviors can detect fraud and single out the entity that’s been doing this with your benefit plans. This also opens up the ability for targeted communication on the topic, better awareness of what to look out for, and involves all stakeholders in the well-being of the program as a whole.

Catch eligibility errors

An annual comprehensive analysis will identify staff and dependents who may have been missed being added or removed from coverage. Big life changes such as babies, marriages or divorce can be overlooked or missed altogether.  More importantly, if an employee (or dependent) is missed for their enrollment on the plan, they  can be deemed a late applicant. They may have to undergo medical underwriting and may in fact be either limited or declined coverage altogether. This will impact the corporate liability in the event of an excess pharmaceutical, disability, or death claim.