Benefits Audit Checklist
Benefits Audit Checklist
Company Name:
Plan Year:
Benefits Administrator:
Number of Eligible Employees:
Health & Welfare Plan Compliance
Confirm that Summary Plan Descriptions have been distributed to all eligible participants within the required timeframes.
Verify that applicable large employer status is correctly determined and that minimum essential coverage is offered to eligible employees.
Review COBRA qualifying event notifications, election timelines, and premium collection processes for compliance with federal requirements.
Ensure that health plan administration practices comply with HIPAA privacy and security rules for protected health information.
Confirm that mental health and substance abuse benefits comply with Mental Health Parity and Addiction Equity Act requirements.
Review cafeteria plan documents to ensure elections, qualifying life events, and non-discrimination testing are properly administered.
Enrollment & Eligibility Management
Audit a sample of enrollments to confirm that waiting periods and eligibility requirements are applied uniformly across all employees.
Review open enrollment records to ensure all employee elections were processed correctly and within the designated enrollment window.
Verify that mid-year enrollment changes due to qualifying life events were processed within required timeframes with proper documentation.
Ensure that dependent eligibility documentation such as marriage certificates and birth certificates is collected and verified.
Confirm that benefits are terminated on the correct date following employee separation and that COBRA notices are sent timely.
Retirement Plan Administration
Confirm that employee deferrals do not exceed annual IRS contribution limits and that catch-up contributions are properly administered.
Verify that employer matching contributions are calculated correctly according to the plan document formula and vesting schedule.
Review ADP, ACP, and top-heavy testing results to ensure the plan does not disproportionately favor highly compensated employees.
Audit participant loans and hardship withdrawals to confirm they comply with plan provisions and IRS regulations.
Confirm that employee salary deferrals are deposited into the plan trust within the DOL's required timeframes.
Ensure the retirement plan document has been updated with all required amendments and restatements within IRS deadlines.
Carrier & Vendor Management
Compare insurance carrier billing statements against internal enrollment records to identify discrepancies in headcount or coverage tiers.
Review SLAs with benefits vendors to ensure performance metrics, response times, and deliverables are being met.
Confirm that insurance broker compensation and fee arrangements are disclosed as required under ERISA Section 408(b)(2).
Verify that electronic enrollment data feeds transmit correct employee information, coverage elections, and effective dates to carriers.
Audit a sample of benefit claims and appeals to ensure they are processed fairly and within required timeframes.
Leave & Time-Off Benefits
Audit paid time off accrual rates and balances to ensure they are calculated correctly based on tenure and policy rules.
Review FMLA eligibility determinations, designation notices, and leave usage tracking for compliance with federal regulations.
Confirm that the company complies with applicable state paid family leave, sick leave, and disability insurance programs.
Verify that parental leave benefits are administered consistently and that employees receive all entitled leave and pay.
Ensure that fitness-for-duty certifications and job restoration procedures for employees returning from leave comply with legal requirements.
Review bereavement and civic duty leave policies to confirm they meet legal minimums and are applied consistently.
Compliance Reporting & Filings
Confirm that annual Form 5500 filings for all applicable benefit plans have been submitted accurately and by the filing deadline.
Verify that Summary Annual Reports have been distributed to plan participants within the required timeframe after Form 5500 filing.
Review a sample of 1095-C forms to ensure coverage offer codes, employee share of cost, and safe harbor codes are correct.
Ensure that all cafeteria plans, self-insured health plans, and dependent care programs pass required non-discrimination tests.
Confirm that the fidelity bond covering plan fiduciaries and persons handling plan funds meets minimum ERISA bonding requirements.
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What Is a Benefits Audit Checklist?
A benefits audit checklist is a structured guide for reviewing employee benefits programs to ensure they are administered correctly, comply with applicable regulations, and deliver value to both the organization and its employees.
It covers plan documentation, eligibility verification, premium accuracy, and regulatory compliance across all benefit types. This checklist helps organizations identify administration errors, control costs, and maintain fiduciary responsibility for employee benefit plans.
Why Organizations Need This Checklist
The process of benefits administration is further complicated due to the presence of numerous laws that need adhering to, including those contained in ERISA, ACA, COBRA, HIPAA, and state laws. Hence, it is not uncommon for mistakes to happen, which may cost firms financially and result in lawsuits, as well as loss of tax qualification.
The checklist consists of the step-by-step process for detecting administration problems before they actually turn into major liabilities.
Key Areas Covered in The Checklist
Areas such as reviewing of plan documents, compliance with administration, eligibility verification, and audits of dependents, in addition to premium calculations, contributions, and bill payment from carriers, are all included in the list.
Coverage continuation under COBRA, ACA requirements, which include measurements and reporting, ERISA fiduciary responsibilities, and notice provisions, are other areas covered. The final sections include performance assessment of vendors and benefit-cost analysis.
How to Use This Free Benefits Audit Checklist
Adapt this list according to the range of benefits provided by your company, as well as regulatory requirements that apply to your benefit plan. Switch the Brief/Detailed to view either a fast test for meeting regulatory standards or full audit protocols for each benefit.
Download this list and work together with your benefits broker, legal representative, and third-party administrators to perform a full audit.
Frequently Asked Questions
What is a benefits audit?
How often should a benefits audit be conducted?
What is a dependent eligibility audit?
What ACA compliance areas should be audited?
How do you reconcile benefits carrier invoices?
What ERISA compliance should be verified in a benefits audit?
How do you audit COBRA administration?
What should you do with benefits audit findings?
Related HR Glossary Terms
Adithyan RK is the Co-Founder and CEO of Hyring, an AI-native recruitment platform that has run over 900,000 AI interviews for companies ranging from early-stage startups to the Fortune 500. He has spent 18 years building technology businesses, starting with a digital consultancy in 2008 and a staff augmentation firm in 2017, before founding Hyring in 2022 to rebuild hiring around evidence instead of guesswork.
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Surya N is the Co-Founder and CTO of Hyring, where he architected the AI interviewing engine that has now conducted over 900,000 interviews for companies ranging from early-stage startups to the Fortune 500. A mechanical engineer who moved into artificial intelligence, he spent 6 years building AI applications inside a technology consultancy before co-founding Hyring, and wrote the first version of its AI interviewer from scratch: a system that listens, adapts its questioning in real time, and flags fraud rather than following a fixed script.
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