Health Insurance Quotes
Ask the Health Insurance Expert
My employer is asking about my daughter's eligibility for my health plan at work. Why are they asking now? She's been on my plan for five years already.
Your question is one a growing number of workers are asking. Health benefit costs have gone through the roof in the last decade, and that, along with a challenging economy, has prompted employers to take a closer look at whether dependents are truly eligible for company health plans. Many employers are now asking for documentation, such as copies of tax returns or birth certificates, to verify dependent eligibility for medical insurance coverage.
Companies began conducting dependent eligibility audits en masse after news reports in 2004 revealed that audits at high-profile companies, such as Ford Motor Co., uncovered tens of thousands of ineligible dependents. Many large employers are self-insured, which means they pay health claims themselves, so ineligible dependents can cost companies millions of dollars. But even small companies that are not self-insured are asking for documentation for dependent eligibility these days.
Ineligible dependents often include children who are past the eligibility age limits (which is now up to age 26, thanks to health reform), ex-spouses, girlfriends and boyfriends and even their offspring.
Auditors say most cases of ineligibility stem from honest mistakes, such as forgetting to remove a spouse from a health plan after going through a divorce. In some cases employees simply don't understand their companies' rules. Some employers, for instance, allow workers to list grandchildren as dependents, but only if they have legal guardianship.
When ineligible dependents are discovered, they are removed from company health plans. Whether those dependents are eligible for health insurance coverage under COBRA is debatable.
A copy of a tax return listing your daughter as a dependent should be sufficient to document her eligibility. You can black out other information for privacy.
For more, see hey, is that really your health insurance dependent?