Dependent Audit Results in Huge Return on Investment

Business Situation & Client Profile

A national retailer with 470 employees approached BMI to conduct a review of dependent coverage elected by plan participants and to validate whether enrolled dependents met the plan’s eligibility requirements.

Solution

BMI customized an audit plan to meet the following objectives:

• 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.

• Securely collect and retain all verification documentation.

• Report findings weekly and provide a final executive summary of results.

Audit Findings

• 47 dependents (5.10% of total) failed to meet plan eligibility requirements.

• Reasons for ineligibility included eligibility for coverage through the dependent’s own employer but did not enroll, unreported divorces and former stepchildren.

Audit Outcome

The client terminated coverage for 47 dependents who were identified by the audit to be ineligible.  Coverage was also terminated for 28 additional dependents who failed to provide information to verify eligibility despite multiple communications prior to the deadline.

First Year Savings Calculations

Average Annual Cost per Dependent: $4,000

Calculated Annual Savings from Dependents Removed: $300,000

Return on Investment: 1,980%

Calculate your potential savings here.