July 1, 2019

Small Group Achieves Big Savings with Dependent Eligibility Verification

Business Situation & Client Profile:  

Following successful claims audits conducted with this organization’s affiliate, this small manufacturer approached BMI to help confirm if enrolled dependents actually met the organization’s self-funded medical plan eligibility requirements.



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

  • Communicate the purpose of the audit, deadlines, compliance requirements, etc. to all 211 employees with 419 dependents on the plan.
  • 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:

  • 98% of audit participants responded to the audit.
  • 31 dependents (7.40% of total) failed to meet plan eligibility requirements.
    • Reasons for ineligibility included voluntary withdrawal, unreported divorces or dependents eligible for medical coverage through their own employer, but had declined coverage despite plan requirements.


Audit Outcome:

Coverage was terminated for the 31 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 over a four month period.


First Year Savings Calculations

Average Annual Cost per Dependent:                                   $3,500
Calculated Annual Savings from 50 Dependents Removed:                                   $175,000
Return on Investment:                                   1,842%

Calculate your organization’s potential savings here.