Investing in an Audit Produces Big Returns

Business Situation

This group health plan sponsor wished to 1) conduct a dependent eligibility audit of all enrolled dependents and 2) a spousal surcharge audit verify whether or not working spouses are eligible to be covered under plans sponsored by their own employer.

Client Profile

  • Chemical Products Distributer and Supplier

  • 1,182 employees covering 2,670 dependents

Audit Finding

In addition to requesting copies of documentation from all enrolled dependents to provide eligibility, enrolled spouses were asked to confirm and have their employers certify whether or not they were eligible for employer-sponsored coverage.

  • 183 dependents (6.85% of total) were flagged for removal of benefits either because of failing eligibility criteria or not responding to the audit.

  • 170 spouses (6.37 % of total) were determined to be eligible for other coverage through their employer.

Audit Benefits

Coverage was terminated immediately for 183 ineligible dependents and a $100 monthly surcharge was added for each of the 170 enrolled spouses. 

First Year Savings Calculations

Average annual cost per dependent: $3,500

Annual savings for ineligible dependents removed: $640,500

Total annual spousal surcharge for enrolled spouses: $204,000

Return on investment: 4,497%

Audit Finding of the M..., BMI Audit Services, Dependent Eligibility ..., Ineligible Dependent A..., Spousal surcharge auditRandy Light, Founder + Executive Advisor