January 3, 2019

Savings Follow Verification of Spousal Eligibility

Business Situation & Client Profile:  

To ease the burden of rising health care costs, this manufacturer enlisted BMI’s assistance to verify if 344 enrolled spouses were eligible under their employer’s health plan and therefore ineligible on the manufacturer’s plan. The employer also elected to verify the eligibility of 623 dependent children enrolled on the plan.



BMI customized a dependent eligibility audit plan to meet the following goals:

  • Communicate the purpose of the audit, deadlines, compliance requirements, etc. to all 444 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.
  • Securely collect and retain all verification documentation.
  • Identify all spouses and children currently enrolled who do not meet eligibility criteria.
  • Report findings weekly and provide a final executive summary of results.


Audit Finding:

  • 99% of audit participants responded to the audit.
  • 49 total dependents (5.07% of total) failed to meet plan eligibility requirements.
    • 33 spouses were found to be eligible for health care coverage through their employer and therefore ineligible on the manufacturer’s plan.
    • 16 children were found to be ineligible for the plan’s benefits.


Audit Outcome:

The client terminated coverage for the 49 dependents who were identified by the audit to be ineligible.  Additionally, coverage was terminated for another 19 dependents who did not prove eligibility prior to the audit’s deadline despite multiple communications.

To limit risk and exposure to ineligible dependents going forward, the client engaged BMI to verify eligibility of all new enrollees on a quarterly basis.


First Year Savings Calculations

Average Annual Cost per Dependent:                                   $3,500
Calculated Annual Savings from 68 Dependents Removed:                                   $238,000
Return on Investment:                                   1,983%

Contact us to learn more about how verification of dependent eligibility can reduce health care spending.