Dependent Eligibility Audit Proves Beneficial in Battling Rising Health Care Costs
Business Situation
After facing significant rising costs in the health plan, this warehousing client elected to conduct a dependent eligibility audit to ensure their 208 employees were not covering ineligible dependents.
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.
Examine 100% of all eligibility records to identify enrolled 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.
Securely collect and retain all verification documentation used to confirm eligibility.
Identify all dependents currently enrolled who do not meet eligibility criteria.
Report findings weekly and provide a final executive summary of results.
Audit Finding
19 dependents (3.72% of total) failed to meet plan eligibility requirements.
Reasons for ineligibility included voluntary removal, divorces and overage dependents.
Audit Outcome
The client terminated coverage immediately for the 19 dependents who were identified by the audit to be ineligible. Additionally, coverage was terminated for another 19 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 Estimated Annual Savings: $133,000 Return on Investment: 1,400%