Savings Follow Removal of Ineligible Dependents from Plan
Business Situation & Client Profile
A health and welfare fund with 636 members covering 1,421 dependents engaged BMI to verify the eligibility of all enrolled dependents to determine if they were eligible to receive health benefits.
Solution
BMI customized an audit plan to meet the following goals:
Communicate the purpose of the audit, deadlines, compliance requirements, etc. to all members 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 Finding
97% of audit participants completed the audit.
29 dependents (2.04 % of total) failed to meet plan eligibility requirements.
Reasons included overage dependents and unreported divorces.
Audit Outcome
The client terminated coverage for the 29 dependents who were identified by the audit to be ineligible. Additionally, coverage was terminated for another 24 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
Calculated Annual Savings from Dependents Removed: $185,500
Return on Investment: 1,037%