Dependent Audit Highlights Importance of Frequent Verification

Business Situation & Client Profile

A large regional hospital with over 1,200 employees engaged BMI to verify if 2,643 enrolled dependents were eligible for benefits according to plan criteria. Their last dependent verification audit was conducted over 5 years ago.   

Solution

BMI customized an audit plan to meet the following objectives:

  • Communicate the purpose of the audit, deadlines and compliance requirements to 1,258 enrolled employees with 1,012 spouses and 1,631 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

  • 32 dependents failed to meet plan eligibility requirements.

  • Reasons for ineligible status included employees requesting removal, unreported divorces and dependents in full-time active military duty.

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

  • 6.02% of total dependents population failed to meet eligibility criteria

Audit Outcome

The client terminated coverage for 159 dependents who were identified by the audit to be ineligible or who failed to respond or verify eligibility prior to the audit’s submission deadline.

First Year Savings Calculations

Average Annual Cost per Dependent: $5,000

 Calculated Annual Savings from Dependents Removed: $795,000

 Return on Investment: 3,015%

Dependent EligibilityRobert Temples