Major Savings with Periodic Dependent Verification
Business Situation & Client Profile
This transportation and logistics company periodically engages with BMI for dependent eligibility verification. Their previous audit was completed in 2017 and resulted in 180 dependents removed which equated to $630,000 in annual savings.
This most recent audit included the verification of 1,390 enrolled dependents to ensure there were no changes in eligibility and that all newly enrolled dependents were eligible for benefits.
Solution
BMI customized a recurring audit plan to meet the following objectives:
Communicate the purpose of the audit, deadlines, and compliance requirements, to 697 employees with 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
60 dependents (4.32% of total) failed to meet plan eligibility requirements.
62 employees covering 94 dependents (6.76% of total) did not provide complete verification information or failed to respond.
Reasons for ineligibility included voluntary removal, divorced spouses and children of ex-domestic partners.
11.08% of total dependents reviewed, failed to meet eligibility requirements.
Audit Outcome
The client terminated coverage for 154 dependents who were either identified to be ineligible or failed to verify eligibility before the submission deadline.
The client has also decided to begin bi-monthly audits of newly enrolled dependents going forward.
First-Year Savings Calculations
Average Annual Cost per Dependent: $5,000
Calculated Annual Savings from Dependents Removed: $770,000
Return on Investment: 3,946%