About Audits of Employee Benefit Plans

Audits of employee benefit plans are an essential part of making sure your business practices meet legal requirements. Business rules and regulations can change on a yearly basis, so it's important that you remain up to date. Audits of employee benefit plans help you to make sure that you're not breaking any laws. Do your audits the right way to ensure compliance.

Frequency

If your business has more that 100 employees, you are required to audit your benefit plans once a year, in time to file it with your annual report. Even if your company has fewer employees, it can still make sense to do it this frequently.

Who Does It?

A true audit of employee benefit plans should be done by an independent qualified public accountant. Without a vested interest in the results of the audit, an independent contractor can give a true view of your program. Look for someone who is a Certified Public Accountant with experience auditing benefit plans. If you're not sure who to hire, try asking other business owners through a networking group like the Chamber of Commerce.

What Gets Audited

The auditor will look at your full benefits package, which might include health insurance, life insurance, vacation time, and other such items. She'll compare your offerings against current legal requirements to make sure that you're in line with what you offer and that you've been distributing the benefits correctly. She will also make sure that you're paying the correct rates for the benefits you're offering based on market conditions.

Self-Audits

Though a professional audit is required, it's also smart to do internal self-audits. The benefits package is part of what keeps your employees working for you, so you should ask about their thoughts to keep them happy. You should also compare what you're offering to similar companies in your area. If the benefits packages of your competitors is more desirable, you may start losing some of your best employees.