Over $2.2 Million Saved by Removing Ineligible Dependents

Business Situation & Client Profile

A group of regional school districts collaborated to save taxpayer money by hiring BMI to verify the eligibility of 3,735 spouses and children on their health plans. The plan's eligibility rules included a "working spouse" provision, which meant that any of the 1,207 spouses who had other health coverage through employment were considered ineligible.

Solution

BMI customized a plan to meet the following objectives:

  • Communicate the purpose, deadlines, and compliance requirements to all employees and their enrolled dependents.

  • Provide a customer service team with toll-free phone lines and bilingual staff.

  • Compare eligibility requirements with the documentation submitted.

  • Identify dependents currently enrolled who do not meet eligibility criteria.

  • Securely collect all verification documentation.

  • Report findings weekly and provide a summary of results.

Audit Findings

  • 457 dependents (12.30% of those audited) failed to meet eligibility requirements.

  • Over 75% of the ineligible dependents were spouses with the option for other coverage.

  • Other reasons for ineligibility included divorces and voluntary removal.

Audit Outcome

Coverage was terminated for 261 dependents identified as ineligible and an additional 196 dependents who failed to verify eligibility before the deadline.

First-Year Savings Calculations

Average Annual Cost per Dependent: $5,000

Calculated Annual Savings from Dependents Removed: $2,285,000

Return on Investment: 6,905%

Spousal Carve-out, Dependent EligibilityRobert Temples