Just a Small % of Ineligibles Leads to Large Savings
Business Situation
This client provides a comprehensive benefits package to employees and their families, but wished to avoid payment of healthcare claims for ineligible dependents. To accomplish this, the client hired BMI to conduct a dependent eligibility audit partnering with Human Resources as an outside independent auditor.
Client Profile
Refiner and marketer of petroleum products
4,000 employees covering 9,733 dependents for a total of 13,733 members
Audit Finding
292 dependents or 3% of total dependents were determined to be ineligible for coverage.
The most common reasons for ineligibility included availability of other coverage, divorces and common law marriage which was not recognized in certain states.
Audit Benefits
Following the audit’s 99% response rate, coverage was terminated immediately for 292 ineligible dependents. First year savings calculation:
Average annual cost per dependent: $3,336
Annual savings for ineligible dependents removed: $974,112
Return on investment: $1,637%