Eligibility Verification Finds Unreported Employee Divorces

Business Situation & Client Profile

A school district with 259 employees approached BMI to conduct a dependent eligibility audit after discovering that an employee’s ex-spouse was enrolled in their health plans and incurring costs.

Solution

BMI customized an audit plan to meet the following objectives:

  • Communicate the purpose of the audit, deadlines, compliance requirements, etc. to 259 employees with 529 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

  • 12 dependents (2% of total) failed to meet plan eligibility requirements.

  • Reasons for ineligibility included:

    • unreported divorces

    • dependents over the age 18 who were no longer eligible for legal guardianship

    • voluntary requests to remove coverage.

Audit Outcome

The client terminated coverage for 12 dependents who were identified by the audit to be ineligible. Coverage was also terminated for 45 additional dependents who failed to provide information to verify eligibility despite multiple communications prior to the audit’s submission deadline.

First Year Savings Calculations

  • Average Annual Cost per Dependent: $4,000

  • Calculated Annual Savings from Dependents Removed: $228,000

  • Return on Investment: 2,018%

Spousal Only Audit, Dependent EligibilityRobert Temples