Besides getting a financial audit from an audit firm in Johor Bahru, business owners should also perform eligibility audits in their company to assess whether the dependents that they offer benefits to are still eligible to receive those benefits.
Ineligibility for Given Benefits
When a company offers the benefits to its employees’ families, it only wants to give to benefit to those family members who are eligible. As time passes, the employees’ children will grow up, or the spouses may divorce, but the corporate benefit plan may still cover them. Nevertheless, employees will not always inform the employer when there is any change in these aspects. Thus, the company may continue paying for these benefits (Also see Vital Bookkeeping Tips for New Businesses). As a result, the company should perform eligibility audits occasionally as an effective way of cutting down the cost of the company. Through this process, it can determine whether they can remove any employee dependents from its benefits plan.
The eligibility audits may cover the areas below:
– Dependent eligibility verification: The company should evaluate the process of accepting the dependent as a beneficiary of the corporate beneficiary plan besides analysing the process of tracking the dependent’s status afterwards. If possible, these processes should eliminate the dependent’s benefits promptly once the dependent has lost his eligibility.
– Eligibility documentation (Also see What are the Current Audit Files and Permanent Audit Files?): The company needs to review the documents that the employee has provided originally to prove that one is an eligible dependent, such as the birth certificate of the employee’s children. By doing so, the company may find out that some of the dependents are no longer eligible for the benefits. For example, the children have grown up and are no longer covered by the corporate benefit plan, or the spouse has divorced.
– Overpayment recovery: Lastly, the company should assess the steps they need to take to obtain the repayment from its employees who have received the benefits for a dependent who has lost his or her eligibility (Also see How Can You Collect Payments for Overdue Invoices?).
In eligible audits, the essential element to consider is the distribution and development of policy. The policy should state clearly the conditions that allow the dependents to be eligible to obtain the benefits. Also, the audits aim to assess the commitment of the company in making sure that they are upholding the standards. By doing so, the employees will be aware of the standards the company has established, hence reducing the possibility where the employees try to circumvent those standards.
Issues Related To Employee Relations
Some employees might be unsatisfied with the eligibility audits since they may feel that the company is interfering their personal affairs extensively. If this happens, the company may tell its employees that this type of audit helps in reducing the cost they spend on employee’s benefits. Thus, the company may continue giving benefits to its staff without spending too much on it.
There is a high possibility where the eligibility audits will result in a request for a waiver so that the company can provide the benefit to an unqualified dependent. In such a situation, the company must reject all the requests. This is because if it allows an employee to get the waiver, other employees are going to request for the waivers too.