Dependent and Spousal Surcharge Verification Saves Money

Business Situation & Client Profile

A food and beverage retailer with 709 employees engaged BMI to verify whether any of the 1,383 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, and compliance requirements, to 709 employees with 464 enrolled spouses and 919 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

  • 28 dependents (2.02% of total) failed to meet plan eligibility requirements.

  • 23 dependents (1.66% of total) were identified as requiring a spousal surcharge.

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

  • Overall fail rate of 12.86%.

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 23 dependents who were not paying previously.

First Year Savings Calculations

 Average Annual Cost per Dependent: $5,000

 Calculated Annual Savings from Dependents Removed: $745,000

 Calculated Annual Savings from Spousal Surcharge: $18,850

 Return on Investment: 3,908.16%

Spousal Surcharge, Dependent EligibilityRobert Temples