Business Situation & Client Profile:
A regional hospital and healthcare center with 650 employees covering 1,480 dependents contacted BMI to: 1) verify the eligibility of all dependents and 2) determine whether or not enrolled spouses should be paying a spousal surcharge per the plan. Verification was previously performed internally.
BMI customized an audit plan to meet the following goals:
- Communicate the purpose of the audit, deadlines, compliance requirements, etc. to all employees with one or more dependents.
- Provide a customer service department with toll-free phone lines and bilingual staff.
- Compare plan eligibility requirements with documentation submitted.
- Identify all dependents currently enrolled who do not meet eligibility criteria or should be paying a spousal surcharge.
- Securely collect and retain all verification documentation.
- Report findings weekly and provide a final executive summary of results.
- 97% of audit participants completed the audit.
- 26 dependents (1.76% of total) failed to meet plan eligibility requirements.
- 160 dependents (10.81% of total) should be paying a spousal surcharge.
The client terminated coverage for the 26 dependents who were identified by the audit to be ineligible and instituted a spousal surcharge for 160 dependents. Additionally, coverage was terminated for another 43 dependents who did not respond completely prior to the audit’s deadline despite multiple communications.
First Year Savings Calculations
|Average Annual Cost per Dependent:||$3,500|
|Calculated Annual Savings from Dependents Removed:||$241,500|
|Annual Spousal Surcharge per Dependent:||$960.00|
|Calculated Annual Savings from Surcharge:||$153,600|
|Return on Investment:||2,141%|
Visit here to learn more about dependent eligibility and spousal surcharge audits.