Dependent Verification Saves Employer over $1 Million
Business Situation & Client Profile
To help combat rising health insurance costs, this electric motor manufacturer and their employee benefits broker engaged BMI to verify whether 3,425 enrolled dependents were eligible for health plan benefits.
Solution
BMI customized an audit plan to meet the following goals:
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
96% of audit participants completed the audit.
73 dependents (2.13% of total) failed to meet plan eligibility requirements.
Reasons for ineligibility included voluntary withdrawal, unreported divorces and dependents eligible for coverage through their own employer but did not enroll.
Audit Outcome
The client terminated coverage for the 73 dependents who were identified by the audit to be ineligible. Coverage was also terminated for 251 additional dependents who did not respond completely prior to the audit’s deadline despite multiple communications.
First Year Savings Calculations
Average Annual Cost per Dependent: $4,000
Calculated Annual Savings from Dependents Removed: $1,296,000
Return on Investment: 3,451%
Use our savings calculator to see how much our dependent verification solutions can save your team.