Posted by Maria T. Hurd, CPA
When auditing claim payments, auditors must take into consideration whether:
- Claim payments have been made in accordance with plan provisions and plan documents.
- Claim payments are made to, or on behalf of, persons entitled to them and only to such persons.
- For self-funded plans, claim payments are recorded completely and accurately.
Taft-Hartley Funds’ Health and Welfare (H&W) plans’ eligibility provisions often require tabulating participants’ hours worked on a quarterly basis, with the possibility of limited bank hours. In an increasingly automated world, a good auditor should be able to efficiently determine whether claim payments were made to participants who had lost coverage and vice versa. BL&S uses sophisticated data manipulation capabilities to compare quarterly eligibility reports to reports of claims paid by date, efficiently isolating instances in which the plan document’s eligibility provisions were not properly administered. Since many H&W plans are self-funded, eligibility errors could significantly impact the plan’s funding levels if controls are not in place to prevent or detect them.