Millions Saved with Periodic Dependent Eligibility Audits

Business Situation & Client Profile

This school district with over 4,600 enrolled dependents on their health plan relies on BMI for periodic dependent eligibility verification to help ensure only eligible dependents remain on the plan following changes in life circumstances such as divorces or legal custody of enrolled dependents. 

A previous audit by BMI led to the identification of over 100 ineligible dependents resulting in hundreds of thousands of dollars in savings.

Solution

BMI provided an audit plan to meet the following goals:

• Communicate the purpose of the audit, deadlines, requirements, etc. to all 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 recently enrolled who do not meet eligibility criteria.

• Securely collect and retain all verification documentation.

• Report findings periodically and provide a final summary of results.

Audit Findings

• 98% participation rate

• 98 dependents (2.09% of total) failed to meet plan eligibility requirements.

• Reasons for ineligibility included unreported divorces, voluntary withdrawal, and changes in legal guardianship resulting in ineligibility.

Audit Outcome

The client terminated coverage for 98 dependents who were identified by the audit to be ineligible.  Coverage was also terminated for 200 additional dependents who provided incomplete information or did not respond despite multiple communications prior to the deadline.

First Year Savings Calculations

Average Annual Cost per Dependent: $4,000

Calculated Annual Savings from Dependents Removed: $1,192,000

Return on Investment: 3,384%