ATLANTA -- The University System of Georgia is launching an audit of every employee's health-insurance dependent coverage in hopes of saving nearly $5 million.
The system's Board of Regents voted today to authorize the first system-wide audit, which has been in the works for more than one year. Similar audits of employers from industry and academia routinely find 8-10 percent of covered dependents aren't actually eligible.
Finding just 151 of them, at an average of $2,000 each, could save enough to pay the $300,000 charged by the consultants performing the audit, Chapman Kelly. A 5-percent drop in dependents could save taxpayers $4.5 million.
"There is no suspicion. First off, it is becoming a general practice in business and higher ed to do audits of these types," said Tom Scheer, associate vice chancellor for benefits. "Secondarily, it is a major initiative of (regents Chairman Robert) Hatcher."
Scheer predicted most of the ineligible dependents are due to confusion about who can be included in coverage. For example, someone who is a dependent in the eyes of the Internal Revenue Service but who isn't in the employee's immediate family isn't eligible. Other possible examples are children who are no longer full-time students or young enough to be covered, and those subject to divorce decrees making them dependents of the other ex-spouse.
The system doesn't cover domestic partners.
All employees will soon get letters letting them know they'll have a one-month amnesty period in which they can voluntarily drop ineligible dependents. Then they'll have two months to supply documentation of eligibility. After than, in cases of those without proof, both the dependent and the employee will be dropped from the plan, and employees will only be able to regain coverage in January after applying in the fall open-enrollment period.
The system isn't planning to impose any other disciplinary measures, but the individual schools could.
"We're not expecting to find a lot of fraud. We're expecting to find these ineligible dependents due to lack of understanding," Scheer said.
The biggest potential for savings comes from the likelihood that many of those ineligible dependents are on the plan because they have expensive medical conditions, he said.
My husband's employer is doing the same thing. We had to send them a copy of the front page of our 2008 1040 tax return and sign, under penalty of perjury, that we were married and that I was his dependent. Lying would subject an employee to immediate dismissal, criminal prosecution, and reimbursement of all fraudulent claims.
"We're not expecting to find a lot of fraud." Oh, but you will. Don't be naive.
Why don't they audit the salaries of the Board of Regents or the higher ups at the University System of Georgia?... oh wait.... that would be unethical for us to cut their salaries.
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