Dependent Verification Identifies Ineligible Relationships

Business Situation & Client Profile

A city government was exploring several options to keep healthcare benefit costs from increasingly unnecessarily and engaged BMI to verify the eligibility of 1,495 dependents enrolled in the group’s health plans.

Solution

BMI customized a recurring audit plan to meet the following objectives:

  • Communicate the purpose of the audit, deadlines, and compliance requirements, to 848 employees and their enrolled 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

  • 98% of employees responded to the verification request.

  • 25 dependents (1.67% of total) failed to meet plan eligibility requirements.

  • 65 dependents (4.35% of total) failed to complete the verification process.

  • Examples of ineligible dependents found included employee girlfriends and fiancées.

Audit Outcome

The client terminated coverage for 25 dependents who were identified to be ineligible and an additional 65 dependents who failed to verify eligibility prior to the verification deadline.

First Year Savings Calculations

Average Annual Cost per Dependent: $5,000

Calculated Annual Savings from Dependents Removed: $450,000

Return on Investment: 1,768%

Dependent EligibilityRobert Temples