Periodic Dependent Eligibility Verification Proves Valuable
Business Situation & Client Profile
For the past decade, the city government has periodically engaged with BMI on dependent eligibility verification. Summary of previous audit results include:
2016 - 48 Ineligible dependents, 3.4% fail rate, 1,089% ROI
2018 - 43 ineligible dependents, 13.5% fail rate, 1,426% ROI
Most recently, they performed a thorough retrospective audit on 568 employees and their dependents who were enrolled in healthcare coverage. The objective was to ensure that there were no changes in eligibility and that all newly enrolled dependents were eligible for benefits. Results include:
2023 - 75 ineligible dependents, 6.3% fail rate, 2,304% ROI
Solution
BMI customized a recurring audit plan to meet the following objectives:
Communicate the purpose of the audit, deadlines, and compliance requirements, to 568 employees and their 1,187 enrolled dependents.
Provide a customer service department with toll-free phone lines and bilingual staff.
Compare plan eligibility requirements with documentation submitted.
Identify all dependents currently enrolled who do not meet eligibility criteria.
Securely collect and retain all verification documentation.
Report findings weekly and provide a final executive summary of results.
Audit Findings
32 dependents (2.70% of total) failed to meet plan eligibility requirements.
Employees covering 43 dependents (3.6% of total) did not provide complete verification information or failed to respond.
Reasons for ineligibility included unreported divorces and relationships not covered by the plan.
Audit Outcome
The client terminated coverage for all dependents who were identified to be ineligible and those who failed to respond or verify eligibility prior to the submission deadline, which included 6.3% of enrolled dependents.
First Year Savings Calculations
Average Annual Cost per Dependent: $5,000
Calculated Annual Savings from Dependents Removed: $375,000
Return on Investment: 2,304%