Over $180,000 Saved Following Ineligible Dependent Removal

Business Situation & Client Profile

A manufacturer with 358 employees approached BMI to conduct a dependent eligibility audit after suspecting ineligible dependents were enrolled on the plan causing costs to increase unnecessarily.

Solution

BMI customized an audit plan to meet the following objectives:

  • Communicate the purpose of the audit, deadlines, compliance requirements, etc. to all employees with one or more 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

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

  • Reasons for ineligibility and removal included unreported divorces, employees not married to the parent of the enrolled dependent and voluntary requests to remove coverage.

Audit Outcome

The client terminated coverage for 16 dependents who were identified by the audit to be ineligible.  Coverage was also terminated for 30 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: $184,000

  •  Return on Investment: 1,486%

Dependent EligibilityRobert Temples