Business Situation & Client Profile:
A small employer group with 259 employees covering 600 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.
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.
- 98% of audit participants completed the audit.
- 10 dependents (1.67% of total) failed to meet plan eligibility requirements.
- 60 dependents (10.00% of total) should be paying a spousal surcharge.
The client terminated coverage for the 10 dependents who were identified by the audit to be ineligible and began applying a spousal surcharge for 60 dependents. Additionally, coverage was terminated for another 17 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:||$94,500|
|Annual Spousal Surcharge per Dependent:||$1,200|
|Calculated Annual Savings from Surcharge:||$72,000|
|Return on Investment:||1,556%|