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How to Conduct a Dependent Eligibility Verification Audit

Author: James O'Keefe, The Seabreeze Group LLC

The rising cost of providing health care coverage for an employer can be overwhelming, and the use of a dependent eligibility verification audit (or dependent audit) can be an effective method of controlling costs.

Dependent audits are conducted to ensure that only eligible dependents are enrolled in the health plan. Reasons an employer might decide to conduct a dependent audit include:

  • To reduce costs by removing ineligible dependents from the plan;
  • To comply with the Employee Retirement Income Security Act (ERISA); and
  • To ensure an appropriate system of checks and balances.

Many employers conduct dependent audits every two to three years to ensure that only approved dependents are covered under the health plan. Employers that have not conducted a dependent audit may want to consider conducting one.