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September 2, 2016

Small Group Achieves Big Savings Investing in Dependent Eligibility Audit

Business Situation:
This client approached BMI to conduct a dependent eligibility audit after reading about the savings obtained from a similar sized organization in a previous Audit Finding of the Month.

 

Client Profile:

  • Manufacturing
  • 223 Employees Covering 456 Dependents
 

Audit Finding:
The client achieved a 98% employee response rate to the dependent verification process which resulted in:

  • 32 dependents (7.02% of total) failing to meet plan eligibility requirements. (More than half voluntarily requested removal due to ineligibility.)
  • Reasons for removal included the inability to prove an eligible relationship or because the dependent was eligible for coverage through their own employer. 

 

Audit Outcome:
The client decided to terminate coverage immediately for the 32 dependents who were identified by the audit to be ineligible.  Additionally, coverage for 24 dependents who did not respond completely prior to the audit deadline was terminated.

 

First Year Savings Calculations

Average Annual Cost per Dependent:
                                  $3,500
Estimated Annual Savings:
                                  $196,000
Return on Investment:
                                  Over 2,000%