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November 5, 2018

Small Employer Achieves Big Savings through Dependent Eligibility Audit

Business Situation & Client Profile:  

Facing rising costs to provide employee benefits, this institute of higher education contacted BMI to verify the eligibility of all 484 dependents enrolled in their health care plans.

 Solution:

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

  • Communicate the purpose of the audit, deadlines, compliance requirements, etc. to all 214 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 dependents 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.
  • 17 dependents (3.51% of total) failed to meet plan eligibility requirements or were employed and required to participate in his/her employer sponsored health care plan.

 Audit Outcome:

The client terminated coverage for the 17 dependents who were identified by the audit to be ineligible.  Additionally, coverage was terminated for another 18 dependents who did not prove eligibility 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:                                   $122,500
Return on Investment:                                   1,289%

Visit here to learn more about dependent eligibility audits and why to hire an outside firm to conduct them.