Cathie's Corner Blog

(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.

(Published June 22, 2009)

My husband just got back from two weeks in Washington, DC, making the political rounds. He told me that the hot-button item down there is health care reform, and we should be seeing a lot about it shortly.

Let me back up a bit. My state of Massachusetts is one of two where employers are required by state law to offer health insurance to its full-time employees, with full-time being defined as those who regularly work 35 hours a week. (The other state, Hawaii, has a different definition.) Indeed, Massachusetts residents are required by law to have health insurance. To assist those who do not have access to employer-sponsored health insurance, or small business owners who cannot afford the premiums offered by independent health care insurers, a semi-public agency has been set up by the state to offer no- or low-cost insurance to those who qualify. The agency also determines who qualifies for this assistance.

Evidently, the most likely scenario that we will see on the national level is some variance on the Massachusetts plan. Although some would prefer simply tinkering with the existing set-up, it is more likely that some form of quasi-governmental agency will offer no- or low-cost care to individuals and business owners. Since the federal government will not have to make a profit, these plans will be more affordable than those offered by private insurance carriers. This, in turn, or so it is hoped, will force Blue Cross, et al., to reduce their premiums, making private insurance more affordable, as well.

I asked my husband whether or not employers would have access to the plans offered by the semi-public agency, the way they do in Massachusetts, since that would really provide competition to the health insurance industry. He said it would depend on how the final bill panned out, but that it seemed likely.

The reason I'm telling you about this now is that whatever bill the House and the Senate finally agree on is likely to be finalized this year, before we all go to open enrollment. And it's quite likely that President Obama will sign it.

We all know that just because Congress comes to an agreement on the bill doesn't mean that it will be effective this year. We may have another year or so on the old system while details are finalized and the quasi-governmental agency is set up and put into operation. Plans will have to be customized and established. But there is no getting around it; health care reform, for what it's worth, is coming and coming soon, whether we like it or not. Those of us in HR, and particularly those of us who manage benefits, will be the ones to put our employers into compliance with whatever law goes into effect, not to mention explaining it to our employees. Let's keep in touch with what's going on on Capitol Hill, so that we're prepared with answers when employees come asking.

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.