For Businesses
This Service is For:
Employers (sole proprietors or large organizations) seeking a high-value, pay-as-you-go employee benefit that can help manage health plan costs.
What You Will Need:
An Itemized bill and UB-04 from a hospital or clinic.
Turnaround Time:
Variable depending on number of bills to be audited. Usually ten business days from audit initiation based on scheduling.
Cost:
$500 for the first bill audited. $250 for each additonal bill.
See Tax Benefits Below!
Process
Click here to schedule a free audit overview consultation or request an employee audit. You can also read about the entire audit process in our client guide.
Tax Benefits for Businesses and Their Employees
Businesses May Deduct 100% of Employee Benefit Audit Expenses
- A high-value, non contract, pay-as-you-go employee benefit
- Reduces Employer Taxable Income
- Protects Employees and Organizational Finances from Erroneous Medical Charges
Businesses can offer forensic medical audits as a pay-as-you-go employee benefit, where the company pays for the service only when it is used. Under this model, the employer contracts for the audit, receives the invoice, and covers the cost as part of its benefits program, while the employee receives the audit and any resulting findings. This structure allows companies to provide a high-value service without committing to fixed premiums or ongoing plan costs, making it a flexible addition to existing health benefits.
The value of this benefit comes from both employee support and financial oversight. Employees gain an added layer of protection against billing errors, overcharges, or unnecessary medical expenses, which can improve financial well-being and confidence in their healthcare. At the same time, when audits identify incorrect or inflated charges tied to an employer-funded health plan, those findings can lead to corrections or reimbursements. This can reduce the employer’s overall cost-sharing burden, improve plan efficiency, and create a more transparent healthcare spending environment.
Example: A self-funded employer pays 80% of covered medical costs. An audit uncovers $2,000 in improper charges on a $10,000 claim. By correcting the bill, the total claim drops to $8,000, reducing the employer’s share by $1,600 (80% of the corrected amount), creating immediate savings
Example: An employee meets their deductible due to an overstated hospital bill. A forensic audit later reduces the bill by $1,500, bringing the employee back below the deductible threshold. This shifts a portion of the cost back to the employee’s responsibility and reduces the employer’s plan payout.
Example: A company offers audits as a benefit across its workforce. Over the course of a year, multiple audits uncover billing errors totaling $25,000 in corrections. These adjustments reduce total plan expenditures, helping the employer lower its aggregate cost sharing and better control annual healthcare spending.
From a tax perspective, the cost of providing these audits is treated as an ordinary and necessary business expense under IRC §162. Employers typically deduct the expense on their business return (for example, on Form 1120, 1120S, or Schedule C (Form 1040) depending on entity type) as part of employee benefit or professional service costs. Proper documentation should include invoices, proof of payment, and records showing the business purpose of the expense. When structured and documented correctly, this method allows the business to deduct the full cost of the benefit thereby reducing taxable income, protecting organizational finances, and offering a meaningful, cost-conscious healthcare benefit to employees.