(Published June 29, 2009)
How often do you audit your benefits plans? It can't be often enough, I sometimes think.
A couple of years ago, I came into a company just after a lazy Benefits clerk had been fired for cause. Among the causes: She continually forgot to notify Blue Cross when an employee was terminated. She'd cancel them in the HRIS system, but never notify the health insurance carrier. When we audited the plan, we found that we were paying approximately $85,000 a quarter for health insurance on employees who were no longer with us and who had not elected COBRA.
Where I am now, we recently discovered that we were paying for health insurance on a fellow who had been dead for two years. This triggered a "death audit," which is still ongoing — he wasn't the only one.
There are several of us still laughing about another incident that occurred the other day. We're in an open enrollment period for a new benefit we're rolling out next month, a spouse and dependent life program. Spousal equivalents (SE) are allowed to enroll, as long as the employees complete an affidavit confirming that the SEs meet our definition. We have a standard affidavit on file that the employees can easily access.
A fellow sent along a non-standard affidavit, which caught my attention. He was looking to insure a spousal equivalent and two children. His notarized statement said, "Joan Johnson [not the actual name] is my domestic partner, living with me at [address]."
Well, I don't know what your first thought would be, but mine was to first, confirm the address and second, to see if he had a standard affidavit on file. The standard one spells out certain requirements, such as the length of time they've been together and that they have joint financial records. The address we had on file is in the same town, but is a different street address. He had family coverage, covering the same two children he wanted to put on the new life benefit, but we had a spouse, Maggie (again, not the real name), listed instead of the spousal equivalent he had on the life enrollment form.
Even then, I assumed that he had been divorced, was covering a spouse per court order, and had neglected to send in an address change. But we found we had no copy of a divorce decree on file. That was when I went to his manager.
The manager did some checking, and came back to inform me that the information we had in our computer records is correct. We didn't have a divorce decree on file because he is not divorced. He is still married and living at the home. Evidently, he just wanted to cover…his girlfriend?
The employee claimed to have filled out the wrong form; he thought he was applying for supplemental life (which we also offer) and wanted to make her and his children the beneficiaries. Why am I having a hard time believing him?
And to think that if he had used a standard affidavit, I never would have noticed. Until, somewhere down the line, someone audited the plan!
Catherine Bannon is an HR consultant in Marshfield, MA (catherine.bannon@gmail.com). Bannon worked for 10 years in HR management before starting her consulting practice.
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