Removal of Ineligible Dependents Translates to Savings
Business Situation & Client Profile
A city government provides a comprehensive benefits package to 1,304 employees and their 2,663 dependents. To avoid payment of health claim claims for ineligible dependents, the city contracted with BMI to administer a comprehensive dependent eligibility audit.
Solution
BMI customized an audit plan to meet the city’s following goals:
Provide a method to update the city’s database of eligible dependents.
Identify all dependents currently enrolled who do not meet eligibility criteria.
Educate employees on the definition of who is an “eligible dependent”.
Decrease overall healthcare costs.
Audit Finding
97% of audit participants completed the audit.
73 dependents (2.74% of total) failed to meet plan eligibility requirements.
Reasons for ineligibility included voluntary removal, unreported divorces, and overage dependents who did not meet criteria to continue coverage.
Audit Outcome
The client terminated coverage for the 73 dependents who were identified by the audit to be ineligible. Additionally, coverage was terminated for another 69 dependents who did not respond completely prior to the audit’s deadline despite multiple communications.
First Year Savings Calculations
Average Annual Cost per Dependent: $3,500 Estimated Annual Savings: $497,000 Return on Investment: 1,461%
Visit here to learn more about how a dependent eligibility audit can help your organization.