Other Coverage Availability Leads to Ineligible Dependents
Business Situation
Following several recent acquisitions and after performing periodic dependent eligibility audits over the past few years, this client preferred to outsource the audit. This was done in part due to continuous efforts to maximize efficiencies in their insurance coverage administration while minimizing the associated costs not only to the benefits staff, but also to their employees.
Client Profile
Specialized behavioral healthcare organization
1,280 employees covering 2,496 dependents for a total of 3,776 members
Audit Finding
Utilizing supplemental internal communications to employee’s announcing the audit and its intention; the client achieved a 100% response rate which revealed the following:
173 dependents (6.93% of total) were determined to be ineligible.
The most common reason for failing eligibility was the availability of other insurance coverage.
Audit Benefits
Coverage was terminated immediately for 173 ineligible dependents, thus avoiding future payment of healthcare claims for ineligible dependents under the plan.
First Year Savings Calculation
Average annual cost per dependent: $4,100
Total annual savings for ineligible dependents: $709,300
Return on Investment: $2,816%