What’s the latest trend that human resources departments are using to control costs? According to a Business Week article in this week’s issue, it’s "Dependent Eligibility Audits". What are they? The article explains:
Dependent eligibility audits," in which companies demand proof that spouses and children qualify for medical benefits, are swiftly becoming both fashionable and financially rewarding for companies frantic to curb the runaway costs of health coverage. Companies such as Boeing, General Motors, and American Airlines have been asking workers to send in marriage licenses, birth certificates, student IDs, and tax returns. The goal: to cull the benefits rolls of ineligibles, which could include ex-spouses, stepchildren who live elsewhere, or 29-year-old college grads still being claimed as dependents.
While this may appear to simply be a "benefit" issue, some companies are taking this issue serious, including firing some employees, according to the article.
At many companies, missing the deadline for sending in paperwork risks having a dependent’s coverage dropped. Still, there are usually appeal windows of up to 60 days during which coverage can be reinstated if employees show proof. A few companies, however, are getting tough on those who procrastinate or are caught signing up an unqualified person. Some have made employees wait until the next open enrollment period before reinstating insurance if they repeatedly missed deadlines. [One consultant] said one client even fired workers discovered to have enrolled ineligible people because they violated its stringent code of conduct.
While such audits would, at first glance, appear to implicate privacy concerns, employees seeking benefits from a company routinely have to provide information on their dependents anyways. The risks in conducting the audit therefore have to do more with perceptions and managing employees, rather than privacy concerns.
For the HR professionals there, feel free to post your experiences, if any, with such audits and whether this is indeed, a developing trend.