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THE CORPORATIONEmployee Beneficiary Association Plan Audit Program

Audit Objective / Approach: The audit of the Employee Beneficiary Association Plan is directed toward (1)ascertaining that procedures and controls used by the plan administrator (Employer's Health) are adequate toensure that medical claims for eligible employees and beneficiaries are processed accurately and in accordancewith current plan provisions and (2) ensuring that claims are subrogated where appropriate.

The audit is conducted by randomly selecting a sample of paid medical claims and tracing the transactionsthrough the plan administrator's claims processing system. Additionally, procedures are performed to determinethat the plan administrator's records are accurate with respect to eligible employees, eligible beneficiaries andplan provisions. Due to the technical nature of the plan document and provisions, the audit is conducted withassistance from the Manager of Employee Benefits.

Department Audited:

Department Contact:

Audit Procedures: Workpaper

Reference

1. Review and document claim processing procedures and controls. Some specific

areas include:- organization of staff- mailroom procedures- verification of eligibility of the employee- verification of the claim- duplicate payment of claim- supervisory review and approval of payments- average claim processing time- pending claims

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2. Document how amendments to the plan are integrated into the claims processingcycle. Review amendments to the plan since the last audit to determine that therevisions have been integrated into the claims processing cycle.

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3. Review procedures for identifying and resolving claim overpayments / recoveries,specifically the records which are kept by the Plan Administrator and the follow-upprocedures. Discuss any outstanding overpayments / recoveries and document thestatus of each.

Trace five recoveries/overpayments through the system to ensure that propercredit was received.

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4. Obtain from the Personnel Department or Employee Benefits a list of # employeetermination's within the last three months and verify with the Plan Administrator'srecords noting the date of change and any claims paid after termination date.Include terminating dependents no longer eligible for coverage (i.e. dependents nolonger full-time students).

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5. Obtain from the Personnel Department or Employee Benefits a list of # employeeadditions within the last three months and verify with the Plan Administrator'srecords, noting the date of change and any claims paid before eligibility date.(NOTE: Employees are not eligible for health benefits until XXX months from thedate of hire.)

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Internal Audit Manager Approval __________________________________

7/30/2019 Employee Health Insurance Claims Audit Program

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6. Obtain from the Personnel Department Employee Benefits a list of # recentcoverage changes and verify with the Plan Administrator's records (include jobshares and name changes in sample).

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7. Select # paid claims from the "Detail Claim Report" noting any special claims whichcould include:

a. any problem claims identified by the Employee Benefits Department;b. hospital claims exceeding $;c. psychiatric or alcohol/drug abuse claims;d. claims for retirees 65 or older.

For each of the claims selected, determine that:- basic claim information agrees with initial enrollment form obtained

from Personnel Department or Employee Benefits- the employee is eligible for the benefits requested- the disability is covered by the health plan- there is adequate supporting data accompanying the claim- the correct charges according to the provisions of the health plan

have been paid- the claim has not been submitted and paid previously (verify with

claim processing system by looking at claims with same service date)- the new deductibles begin January 1, xxxx and that there was no

carryover of deductibles (verify against claims paid from January 1, xxxx)- benefits are not covered for reimbursement under state, federal

and other insurance programs (verify with enrollment form and claiminformation).

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8. From the sample of # claims, select # claims to verify that a canceled checksupports each claim.

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9. Review procedures and controls regarding subrogation, particularly STDsubrogation and methods used to forward the credits to The Corporation.

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10. Verify # claim payments over $ made directly to plan member by confirming withthe provider of services and the plan member.

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11. Discuss the claim auditing procedures with local audit management. Documenttheir selection and testing approach and how results are reported. _________

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