Dependent Verification Provides Over $2.42 Million in First-Year Savings
Every ineligible dependent covered under a health plan adds an average of $7,000 annually per dependent. Without a verification process, organizations risk significant financial waste, compliance issues, and higher premiums.
Business Situation & Client Profile
A recent audit involving a major labor union health plan shows just how powerful a dependent eligibility audit can be. BMI Audit Services helped this organization identify ineligible dependents, enforce working spouse plan rules, and save $2.42 million in just one year. Here's how it worked—and how your plan can benefit too.
Solution
BMI Audit Services conducted a comprehensive dependent eligibility verification audit for a client representing 925 families to verify eligibility and ensure only qualified individuals receive benefits.
Key Features:
Full communication campaign with over 11,000 touchpoints
Bilingual call center support
Secure document collection and tracking
Transparent daily reporting via secure portal
Scope:
Families Audited: 925
Dependents Reviewed: 1,901
Total Members: 2,826
Audit Findings
The audit uncovered 46 confirmed ineligible dependents and 300 additional unverified dependents due to incomplete documentation or no response to multiple requests for verification. This accounts for 18.3% of dependents included in the verification process.
Using an estimate of $7,000 per dependent annually, the results were striking:
| Result | Count | Estimated Savings |
|---|---|---|
| Confirmed Ineligible | 46 | $322,000 |
| Unverified (no response + incomplete) | 300 | $2,100,000 |
| Total First-Year Savings | $2,422,000 | |
Among those confirmed as ineligible:
58.7% were voluntarily removed by employees.
34.8% were eligible for coverage elsewhere but had not enrolled.
6.5% were divorced spouses no longer eligible under plan terms.
Audit Outcome
Coverage was terminated for 346 dependents and the plan realized a Return on Investment (ROI) of 8,671%.
Communication Success: Over 92% Response Rate.
Thanks to a structured communication plan—including reminders, final notices, and multiple delivery channels—over 92% of all dependents provided a response or documentation. This engagement helped ensure the audit's accuracy and effectiveness.
Long-Term Benefits of Dependent Auditing
In addition to immediate cost savings, the audit delivered:
Improved plan compliance and data accuracy
Reduced exposure to legal or regulatory issues
Increased awareness among employees about eligibility rules
Ongoing cost control and risk management
By partnering with BMI for dependent eligibility verification, this labor union successfully eliminated unnecessary healthcare costs, improving plan sustainability and financial health.
Conclusion
Dependent verification is a smart investment for any health plan. This case study proves that a dependent eligibility audit isn't just an administrative task. It's a strategic move that can deliver massive savings and long-term health plan stability.
Ready to optimize your health plan?
Contact BMI Audit Services to discuss how a dependent eligibility audit can reduce costs and protect your benefits.