Adding Spousal Surcharge Verification Multiplies the Savings
Business Situation & Client Profile
An employer group with 910 employees covering 2,377 dependents contacted BMI to: 1) verify the eligibility of all dependents and 2) determine whether or not enrolled spouses should be paying a spousal surcharge per the plan.
Solution
BMI customized an audit plan to meet the following goals:
Communicate the purpose of the audit, deadlines, compliance requirements, etc. to all 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.
Identify all dependents currently enrolled who do not meet eligibility criteria or should be paying a spousal surcharge.
Securely collect and retain all verification documentation.
Report findings weekly and provide a final executive summary of results.
Audit Finding
99% of audit participants completed the audit.
38 dependents (1.60% of total) failed to meet plan eligibility requirements.
44 dependents (1.85% of total) should be paying a spousal surcharge.
Audit Outcome
The client terminated coverage for the 38 dependents who were identified by the audit to be ineligible and began applying a spousal surcharge for 44 dependents. Additionally, coverage was terminated for another 36 dependents who did not respond completely prior to the audit’s deadline despite multiple communications.
First Year Savings Calculations
Average Annual Cost per Dependent: $3,500
Calculated Annual Savings from Dependents Removed: $259,000
Annual Spousal Surcharge per Dependent: $1,200
Calculated Annual Savings from Surcharge: $52,800
Return on Investment: 1,353%