How the FLARE™ Method Identified Hidden FSA & HRA Contribution Leakage
A benefits administration review uncovered employer-funded FSA and HRA contributions continuing for terminated and ineligible employees because eligibility updates relied on inconsistent manual processes.
Employer-funded contributions continued after eligibility ended, creating avoidable benefit spending and exposing weaknesses in eligibility tracking, reconciliation, and vendor coordination.
The Benefits Administration Problem
While supporting benefits administration for a previous employer, a review of Flexible Spending Account and Health Reimbursement Arrangement administration revealed a common but costly issue: employees who were terminated or no longer eligible remained active in employer-funded benefit programs.
The issue was not caused by plan design. It was caused by manual eligibility tracking, delayed updates, and insufficient reconciliation controls that allowed certain accounts to slip through the cracks.
The FLARE™ Method in Action
The FLARE™ Method was used to identify where eligibility updates, contribution records, vendor files, and internal benefit administration processes were breaking down.
Find
Identified continued employer-funded contributions for employees who were no longer eligible.
Locate
Located disconnects between HR, payroll, benefits administration, and vendor eligibility updates.
Analyze
Reviewed eligibility records, contribution reports, and administrative workflows to determine where leakage occurred.
Resolve
Recommended recurring eligibility reviews, documented procedures, and stronger reconciliation controls.
Elevate
Created a repeatable eligibility audit process to reduce future benefit cost leakage.
What FLARE™ Found
Eligibility Gaps
Some employees who were no longer eligible for employer-funded benefits remained enrolled in FSA and HRA programs.
Contribution Leakage
Employer contributions continued for certain individuals after termination or loss of eligibility.
Process Disconnects
HR, payroll, benefits administration, and vendors were not consistently synchronized when employee eligibility changed.
How the Process Was Strengthened
The review focused on strengthening administrative controls, improving communication between departments, and creating a repeatable eligibility audit process.
Results After Applying FLARE™
The review helped identify avoidable benefit spending and showed where stronger administrative controls could prevent future cost leakage.
Hidden Cost Leak Identified
Employer-funded contributions were found continuing after eligibility ended.
Eligibility Controls Strengthened
The organization gained clearer procedures for reviewing employee eligibility and benefit status.
Better Coordination
Improved communication between HR, payroll, benefits administration, and vendors reduced future risk.
Key Takeaway
Most benefit cost leaks are not caused by expensive insurance plans. They are caused by administrative processes that quietly fail over time.
The FLARE™ Method helps employers identify hidden eligibility gaps, strengthen administrative controls, and reduce unnecessary employer-funded benefit expenses before those issues become long-term financial problems.
Wondering if Similar Eligibility Issues Exist in Your Organization?
Request a complimentary Benefits Administration & Eligibility Audit to identify potential cost leaks, eligibility issues, and process gaps before they become expensive.
Request a Free FLARE™ Discovery