Dependent and Spousal Surcharge Verification Saves Money

Business Situation & Client Profile

A manufacturer with 270 employees engaged BMI to verify whether any of the 688 enrolled dependents met the plan’s eligibility and spousal surcharge criteria.

Solution

BMI customized an audit plan to meet the following objectives:

  • Communicate the purpose of the audit, deadlines, compliance requirements, etc. to 270 employees with 226 enrolled spouses and 462 dependent children.

  • 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

  • 18 dependents (2.62% of total) failed to meet plan eligibility requirements.

  • 35 spouses (15.49% of total) were identified as requiring a spousal surcharge.

  • 27 additional dependents did not provide complete verification information or failed to respond.

Audit Outcome

The client terminated coverage for all dependents who were identified by the audit to be ineligible and those who failed to respond or verify eligibility prior to the audit’s submission deadline. A spousal surcharge was applied to the 35 dependents who were not paying previously.

First Year Savings Calculations

 Average Annual Cost per Dependent: $5,000

 Calculated Annual Savings from Dependents Removed: $225,000

 Average Spousal Surcharge per Dependent: $5,315.76

 Calculated Annual Savings from Spousal Surcharge: $186,051.60

 Return on Investment: 3,827%

Spousal Surcharge, Dependent EligibilityRobert Temples