Removing Ineligible Dependents Leads to Substantial Savings
Business Situation
While providing comprehensive medical benefits packages to employees, this client wished to avoid payment of healthcare claims for ineligible dependents under the plan.
Client Profile
Construction
1,369 employees covering 2,878 dependents
Audit Finding
The audit consisted of three main separate mailing phases followed by an appeals period producing the following results:
120 dependents (4.17% of total) were determined to be ineligible.
Reasons for ineligibility included overage dependents, failure to prove legal guardianship, divorced and unmarried spouses.
Audit Benefits
The client terminated coverage immediately for the 120 ineligible dependents and is considering removing coverage for additional dependents whose documentation remained incomplete at the close of the audit.
First Year Savings Calculations
Average annual cost per dependent: $3,500
Annual savings for ineligible dependents removed: $420,000
Return on investment: 1,634%