Case Study

A Second Look at Dependent Eligibility

Generally, from a medical and prescription drug claims perspective, dependent children are less costly than any other member type.  Through the end of 2006, our client  experienced a scenario in which non-spousal dependent claims cost the plan 67.8% more on a PMPY basis than employee-related claims ($3,767 vs. $2,245).

Upon review, Banyan noted that this growing spike was attributable to dramatically elevated high-cost claimant activity among dependent children—$11.1M in 2006 alone.  Banyan recommended that the client undertake a formal dependent eligibility audit to ensure that all enrollees met enrollment criteria.

The client conducted an in-depth dependent eligibility audit in early 2007 and learned that 14% of its non-spousal dependent population was technically ineligible for the plan.  In 2008, the client spent $29.7M less in claims associated with dependent children than it did in 2006.