Your Health Plan's Dependent Clauses

Have you been sneaking health coverage for your sister, a cousin, a boyfriend or girlfriend, ex-spouse or perhaps an adult child?

Well, you'd better watch out because this open-enrollment season, more employers are auditing health-plan enrollees to verify that dependents are eligible.

Typically, between 6 and 8 percent of dependents enrolled in a plan are not truly eligible for coverage, but some employers have reported much higher percentages when conducting audits, according to Watson Wyatt Worldwide, which consults with large employers on their open-enrollment programs.

With more companies shifting to electronic enrollment in health plans, employees haven't had to provide documentation to prove who was eligible and who wasn't.

"Over the years, benefits staffs have been reduced and more [companies] have moved to electronic self-service, so paper proof has pretty much been eliminated," said Randall Abbott, a senior consultant with Watson Wyatt. "Basically, it's been an honor system."

But as health-care premiums rise, employers are paying closer attention to the people their employees report as dependents.

So let me warn you, when you get your benefits package this year, carefully look through all the paperwork. If you don't, you might miss a letter like the one I received from my employer but nearly overlooked.

The letter said The Washington Post Co. is conducting an audit of dependents enrolled in its medical, dental, vision and dependent life-insurance benefit plans.

In my case, as with most plans, the audit is taking place in two phases. First, there's an amnesty period. Basically, folks are asked to voluntarily drop ineligible dependents from coverage without any penalties. An amnesty period typically runs from 30 to 90 days.

Following the amnesty period, employees are randomly audited. Some employers may hire an outside firm to conduct an independent audit, Abbott said. That auditor runs a series of electronic screenings to highlight any inconsistencies. For example, it might find that an employee's claim checks for a supposed spouse are being mailed to a different address. Employees with questionable dependent data are sent letters asking that they prove the status of those dependents.

To prove a dependent is legitimate, employees are asked to provide documents such as copies of birth certificates, marriage certificates, tax returns showing joint filing status, home title documents or perhaps some bills.

"This is not intended to be an inquisition," Abbott said. "It is intended to be an effort to make sure the company is spending its health care dollars for the people who are in fact entitled to them."