Administrative Treasure Hunt – finding hidden savings and reducing your liability through billing audit

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An Administrative Billing Audit consists of comparing your current insurance billing to the current staff covered on your payroll.  Why should you audit your bill?  To ensure the Insurer has completed your requests accurately and on time. These errors can create frustration with claims for your employees, creating more headaches for you.

Completing a comprehensive audit of your group insurance bill can be tedious the first time, but the cost savings to your company can far outweigh this initial time investment. Timely changes and adjustments within your group contract may help avoid extra claims added to your plan’s experience, and reduce the risk of resulting excessive premium increases to other employees.

To complete a thorough billing audit, you need your most recent bill(s), your most recent payroll(s), current renewal, a copy of your HR policies and access to your employee files.

What should you be looking for when reviewing your group insurance program?

a) Salary – Review current payroll against the insurance billing to ensure each employee’s benefits accurately reflect the true salary. Keeping salary information current with your carrier ensures proper coverage is available to the employee should such a Life, Accident or Disability claim arise.

b) Terminations – are there any employees listed on the bill that are not on your current payroll? If so, is there a reasonable explanation – maternity/paternity leave, disability, approved Leave of Absence?  If not, how long have these employees been on the plan beyond the termination date? Does this match your current Human Resources policy?

c)  Leaves of Absence

i.  Has the employee returned to work? Have their payroll deductions resumed?

ii. Have they continued to pay for benefits – have any payments been missed? Do they qualify for continuation of benefits?

d) Disability claimants – How long does an employee remain covered under the plan for Health and Dental while receiving disability benefits? Are they within the timeframes set up in the HR policy/Agreement?

e) Rates – Were the correct rates implemented at renewal or date of plan amendment? Are payroll deductions correct? Is there PST/HST applicable on any premium?

f) Life events (marriage, divorce, new children, etc) – Did Health Care and Dental coverage change from single to family or family to single correctly and at the right time? Was Dependent Life added or removed as applicable?

g) Dependent coverage – Are employees who waive Health and Dental benefits due to coverage under their spouse’s plan enrolled in Dependent Life?  Are there any over-age dependents covered that are no longer attending post-secondary education?

h) Coverage changes – Does your plan base coverage on years of service? Have any employees changed classes through promotion?  Are there employees reaching termination/reduction age (i.e. 65 for disability, 70/75/80/85 for other benefits) – Have they been offered the option to convert their reducing or terminating insurance?

i) Optional benefit programs –Are employees paying the correct amount for their age and/or family status?  Have new employees been made aware of what is available for voluntary benefits?

The best time to audit the billing is really up to you. Audits are commonly done as your plan renews, or at year-end. Other opportunities during the year could include plan change implementation; or when performing mass salary updates.  At minimum, we recommend that an audit be performed annually.