As employees contemplate their choices of employee benefits for the coming year, they might keep this fact in mind:

In an effort to cut their health insurance costs, more employers are conducting "dependent eligibility audits" to ensure that the people their employees are putting on their health insurance plans truly do qualify for the benefits.

"Employers are trying to cut costs," said Marianne Fazen, executive director of the Dallas-Fort Worth Business Group on Health. "If they don't cut costs, it's going to harm all the other employees who are eligible."

So companies are becoming pickier when it comes to covering dependents and spouses.

Some are charging extra to cover a spouse if he or she can be covered by his or her own employer's health plan.

"We are finding a great deal of abuse and fraud on employer health plans through our audit services," said Brennan L. Clipp, vice president of sales and marketing at HRAdvance Enterprises in Dallas, which conducts dependent eligibility audits for companies.

"We just completed an audit for an oil and gas company that found 12 percent of the dependents enrolled on their health plans were ineligible to participate. The company terminated these ineligible dependents and recognized an annual savings on their health plan of $520,191."

Employers have an obligation to ensure that health plan dollars be used for eligible expenses, Ms. Clipp said.

"The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and eligible beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses for those eligible individuals," she said.

"There can be personal liability issues for a benefit's supervisor who knowingly pays claims for ineligible dependents."

Generally, 5 percent to 15 percent of employees have ineligible dependents enrolled in corporate health plans, Ms. Clipp said.

In a dependent-eligibility audit, employees with dependents are asked to provide official confirmation that the dependents they have covered under their plan are eligible.

Grace period

The verifying documents can include copies of birth certificates, tax returns, marriage licenses, proof that you're providing medical insurance to your child in a divorce, and proof that you're part of a domestic partnership.

If employees already know that their dependents aren't eligible for employer health care coverage, an amnesty period of typically 30 to 45 days is offered during which they can drop the dependent from their coverage with no questions asked.

If you get a letter of an audit, don't ignore it.

If the employee doesn't respond to the request to provide verifying documents, he's notified that his dependents will be dropped from coverage on a future target date.

Some companies offer an appeals process, which enables employees to challenge why their verification documents weren't accepted. Employees may also use the time to submit the documents that they didn't submit during the audit.

In some cases, employers may require the participant to repay the plan for benefits paid out on ineligible dependents.

Changing reasons

Family circumstances have led to many workers putting ineligible dependents on their health insurance.

"The most common trait is that demographics of the American family have changed so dramatically," Ms. Clipp said. "There are a lot of stepfamilies. That's a big one, and when you incorporate that with online enrollment tools that employers are using, it takes away the checks and balances."

Some common ineligible dependents include:

•Students over 19 years old. "On self-insured plans, it's typically age 19 to as old as 25 that they stop coverage," Ms. Clipp said. "That varies by state and employer."

•Former spouses. "We've found the biggest offenders are ex-spouses" and ex-significant others," Ms. Clipp said. "We have grandchildren who shouldn't be covered, nieces and nephews. We have found neighbors' children. We have found housekeepers' children."

That can cost a company a lot of money. The average cost to insure a dependent on an employer's health plan averages $2,800 to $3,000 per year, Ms. Clipp said.

"We don't want to see people go uninsured, but the real problem is employers are paying for people when they do not have requirements to pay those bills."

The drive toward cutting health care costs also is hitting legitimately qualified dependents.

"Employers want to continue to provide benefits, but it's getting to the point now where some employers can't even afford to offer a benefit plan," Ms. Clipp said.