When is the last time you carefully reviewed your group insurance bills?
If you’re like many employers, the answer is probably not anytime recently.
We routinely audit the bills for new clients when we start working with them, and more often than not, we find mistakes. Here are a few of the more common ones:
- There are people on the bills that are no longer employed.
- New hires have not been added to the bills after their service waiting period ended.
- Dependents are missing or covered long after they should’ve been added or removed.
Here are some examples:
- We began working with a new client in April. There were 12 people hired over the past 18 months who had not been added to the employer paid life and LTD plan.
- A bank client asked us to audit their group life bill which included retiree life. We found about 18 people on the bill who had long since passed away.
- Another new client’s bills were a complete mess with dozens of new employees missing, salaries had not been updated in years, and several terminated employees were still on the bills.
Keeping your bills current and accurate is really important for a few reasons:
- If there ever is a dispute about a claim, you want to be sure all of your employees and dependents are shown as covered on the bill.
- Paying for extra dependents or terminated employees makes no sense.
- Improperly calculated covered insurance volumes for life and disability plans could negatively impact claims.
If you’d like to do your own audit, here are a few tips:
- Start with an accurate master list of employees that should be on each plan, which dependents should be on each plan, and accurate covered payroll and insured volumes for the life and disability plans.
- The accuracy of your covered payroll and insured volume amounts depends on your life and disability plan contracts’ definition of earnings. Two common definitions are current salary, which requires an update every time there is a salary change, or W2 earnings, which only has to be updated once per year. You can make changes in your earnings definition pretty much any time if you want to.
- Make sure you know the service waiting period for each of your plans so you can determine when your new hires should be added to each plan. It’s easier if the service waiting period is the same for all plans.
- An HRIS system or online enrollment tool can help you maintain current census data to check against your bills.
- Know the maximum age for dependent “children” to be covered on your health, dental, and vision plans. For most, this will be age 26. Understand when the kids will be kicked off the plan, and make sure the parents know that day is coming. Some insurance companies’ only notification is a letter to the dependent, and not all of them choose to read letters from insurance companies.
- If you don’t want to add a bill audit to your to-do list, there are companies out there, including MillBrook Benefits, that can do it for you.
Finally, if you would like to discuss bill audits, our Complete Benefits Management service, or other employee benefits topics, call us. We’d love to hear from you. Our toll free number is 866-724-0008. Alternatively, you could click the link below.
