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March 3, 2012

BMI Audit Finding of the Month: Dependents Fail Full-Time Student Status Eligibility Requirement

Business Situation:
After implementing changes required by the Affordable Care Act, including the requirement to allow dependent children up to age 26 to enroll in company sponsored health care plans, our client chose to conduct an audit as one of the ways to control the increase of costs associated with their medical, dental and vision plans. Note that the “age 26” criteria is not required in separate dental and/or vision plans.

Client Profile:

  • Energy/Utility Company
  • 2,750 employees covering 5,840 dependents

Audit Finding:
233 dependents (4.00%) failed to satisfy the plan’s eligibility criteria. A large majority of these ineligible dependents were not enrolled as full-time students. The dental and vision plans continued to require full-time student status as a criteria for eligibility; however, the client’s third-party eligibility vendor had become complacent in its ongoing request for student documentation.

Audit Benefits:
Client terminated coverage for 233 dependents (4.00 % of total) saving well over $200,000 and achieved a “clean slate” for managing eligibility on an ongoing basis.

Client Feedback:
“BMI was extremely knowledgeable, focused and professional. The team’s follow up was wonderful and the audit went very smoothly.”