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December 2, 2013

Spousal Surcharge Audit – An Effective Strategy to Reduce Costs.

Business Situation:
With the steadily increasing costs of health care, our client engaged us to conduct a Spousal Surcharge audit to ensure that spouses who are eligible for other employer-sponsored coverage are subject to an additional premium if they chose not to enroll.  The audit was also designed to simultaneously verify whether the spouse was eligible to be enrolled in the client’s health plans initially.

Client Profile:
  • Retailer with 1,210 employees enrolling a spouse.

Audit Finding:

The client achieved a 99% response rate which revealed the following:

  • 51 spouses (4.21% of total) were determined to be eligible for other coverage through their employer.
  • 26 spouses (2.14% of total) were determined to be ineligible for coverage.

Audit Benefits:
Coverage was terminated for 26 spouses.  A spousal surcharge was added for 51 spouses who continued spousal coverage.  Note the following ROI calculations:

Average annual cost of a spouse:                                             $3,127
Total annual spousal surcharges for 51 spouses:                     $97,920
Total annual savings for removed ineligible spouses:             $81,302
Return on Investment:                                                              7,968%