An audit has found that a "significant number" of election forms for federal health benefits were processed by the IRS with missing information needed to confirm beneficiaries were eligible for insurance.
The audit, done by the Treasury Inspector General for Tax Administration, was instituted to analyze weaknesses in the process of adding and removing dependents for coverage in the Federal Employee Health Benefits Program.
Related: Read the Report
Investigators found that paper forms used to enroll new hire or first-time eligible employees in the FEHBP did not always include information that might disqualify dependents from coverage, but were still processed by the IRS, potentially raising health care costs by granting ineligible insurance coverage.
"Processing incomplete Election Forms and Election Forms without sufficient supporting documentation increases the risk that IRS employees and dependents are receiving and retaining FEHB health benefits to which they are not entitled," the report said. "This could result in increased costs to both the IRS and employees through increased premiums.
Among the missing information the audit noted:
- Information on coverage by other insurance plans for new hires (23 percent missing) or on change-in-status forms (16 percent). Coverage under another program is an automatic disqualifier for federal coverage for employees, but not necessarily for dependents;
- A statement required to support a change of family coverage, missing on 11 percent of the forms;
- Documentation needed to add a foster child or a disabled child age 26 or older.
FEHBP provides health insurance coverage to more than 8 million people, including federal employees, former employees, family members and former spouses. The auditors took a random sampling of more than 3,000 paper forms requesting first-time enrollment or a change in family status in 2014.
The IRS Human Capital Office handles questions from other human resource offices on issues of policy or rules implementation when it comes to insurance eligibility. But investigators found the email procedures for contacting the Human Capital Office contained no guidance or timeliness standards for response.
Furthermore, investigators said the IRS did not track the number of requests for clarification made, but did provide examples of questions received.
TIGTA recommended that IRS develop stronger assurance that forms were complete and formalize procedures within the Human Capital Office in regard to assistance requests on policy questions.
IRS agreed with both recommendations and noted that it updated forms and procedures for insurance processing. New documentation was also included for family doctors to complete to assure coverage disabled children over the age of 26.
IRS also said it would review practices and develop policies for assistance requests within the Human Capital Office.
