Savings Continue Following Annual Dependent Eligibility Audit

Business Situation & Client Profile 

This manufacturing client contacted BMI to conduct an annual dependent eligibility audit of all 2,361 enrolled dependents due to high turnover and limited resources to verify eligibility for new hires. Their last audit with BMI resulted in over $450,000 in annual savings. 

Solution

BMI customized an audit plan to meet the following objectives:

  • Communicate the purpose of the audit, deadlines, compliance requirements, etc. to all employees with one or more dependents.

  • Examine 100% of all eligibility records to identify enrolled employees with one or more dependents.

  • Provide a customer service department with toll-free phone lines and bilingual staff.

  • Compare plan eligibility requirements with documentation submitted.

  • Securely collect and retain all verification documentation used to confirm eligibility.

  • Identify all dependents currently enrolled who do not meet eligibility criteria.

  • Report findings weekly and provide a final executive summary of results.

 

Audit Finding

  • Over 96% of audit participants completed the audit.

  • 62 dependents (2.63% of total) failed to meet plan eligibility requirements.

  • Reasons for ineligibility included voluntary removal, unreported divorces, or dependents eligible for coverage through their own employer.

Audit Outcome

The client terminated coverage for the 62 dependents who were identified by the audit to be ineligible.  Additionally, coverage was terminated for another 74 dependents who did not respond completely prior to the audit’s deadline despite multiple communications.

First Year Savings Calculations

Average Annual Cost per Dependent: $5,256 Estimated Annual Savings: $714,816 Return on Investment: 1,845%

Visit here to learn more about ongoing dependent verification services.

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