Ongoing Dependent Verification Audit Delivers Long-Term Compliance and Cost Savings 

Business Situation & Client Profile

A leading U.S. manufacturer recently partnered with BMI Audit Services to evaluate dependent eligibility across its health plan. The company had 809 dependents enrolled and wanted to ensure compliance with the plan’s dependent eligibility criteria to reduce risk and control costs. 

Solution

To maintain employee benefits compliance, BMI developed a customized dependent verification strategy with the following goals: 

  • Clearly communicate audit purpose, deadlines, and documentation requirements to 376 employees with 270 spouses and 539 dependent children enrolled. 

  • Provide access to bilingual customer service and toll-free helplines to support employees throughout the process. 

  • Collect and securely store verification documents submitted by employees. 

  • Evaluate each dependent against the plan’s eligibility criteria. 

  • Identify ineligible dependents and report findings weekly, followed by a comprehensive executive summary. 

Audit Findings

BMI's audit revealed actionable insights: 

  • 47 dependents (5.81%) were found ineligible for coverage based on plan requirements. 

  • Of those, 28 dependents (60%) had access to employer-sponsored coverage but had not enrolled. 

  • An additional 77 dependents failed to submit verification documentation or respond by the deadline. 

Audit Outcome

As a result of the audit: 

  • The client removed 124 ineligible dependents from the health plan. 

  • The average cost per dependent was $5,000. 

  • First-year savings totaled $620,000, producing a return on investment (ROI) of 4,950%. 

Following the success of the audit, the client engaged BMI to perform ongoing dependent verification to ensure continued compliance and financial control. 

Conclusion

This audit highlights the measurable impact of proactive dependent verification in maintaining employee benefits compliance. Identifying ineligible dependents not only reduced costs but also strengthened the integrity of the client’s health plan. Regular audits continue to be a key strategy for responsible benefits administration 

Spousal Carve-out, Dependent EligibilityRobert Temples