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July 7, 2016

Dependent Eligibility Audit Results in Over 3 Million in Annual Savings.

Business Situation:
This client approached BMI to conduct a dependent eligibility audit due to limited internal resources and to gain better understanding their plan’s eligibility requirements.

 

Client Profile:

  • Health Care
  • 4,579 Employees Covering 9,902 Dependents
 

Audit Finding:
The client achieved a 97% employee response rate to the dependent verification process which resulted in:

  • 563 dependents (5.68% of total) failing to meet plan eligibility requirements.
  • Reasons for ineligibility included overage dependents, lack of documentation of legal custody, unreported divorces, and eligibility for other coverage through other employment.
 

Audit Outcome:
The client decided to terminate coverage immediately for the 563 dependents who were identified by the audit to be ineligible.  Additionally, coverage for 387 dependents who did not respond completely prior to the audit deadline was terminated.
 
Immediately following the audit, BMI was engaged by the client to perform dependent eligibility audits on a quarterly basis.

First Year Savings Calculations

Average Annual Cost per Dependent:
                                  $3,500
Estimated Annual Savings:
                                  $3,325,000
Return on Investment:
                                  4,034%