Small Investment for Dependent Eligibility Audit Produces Meaningful Results

Business Situation

To help reduce health care expenditures, this client chose to conduct a dependent eligibility audit to verify whether or not enrolled dependents met eligibility requirements for the company’s two medical plans. 

Client Profile

  • Aviation Operator

  • 303 Employees Covering 693 Dependents

Audit Finding

The client achieved a 100% employee response rate to the dependent verification process which resulted in:

  • 16 dependents (2.3 % of total) failed to meet plan eligibility requirements.

  • 8 dependents (1.15% of total) should have been subject to a coverage surcharge.

  • Reasons for ineligibility included unreported divorces, overage dependents or failure to prove legal custody of the enrolled dependent. The client terminated coverage immediately for the 16 dependents who were identified by the audit to be ineligible. A surcharge was also assessed to the 8 dependents who chose not to enroll in their employer’s group coverage despite being eligible.

Audit Outcome

The client terminated coverage immediately for the 16 dependents who were identified by the dependent eligibility audit to be ineligible.  A surcharge was also assessed to the 8 dependents who chose not to enroll in their employer’s group coverage despite being eligible.

First Year Savings Calculations

Average Annual Cost per Dependent: $3,500 Estimated Annual Savings: $56,000 Return on Investment: 524%

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