The State Worker

CalPERS to keep eye on health rolls

Keep those marriage and tax records handy, state workers and state retirees. You’re going to need them.

A bill headed to Gov. Jerry Brown’s desk requires that state employers periodically verify the eligibility of the dependents on their health plans.

Senate Bill 98 follows a CalPERS audit last year that found 9,000 people were wrongly listed as dependents eligible for state medical coverage. During an amnesty period before the audit, state workers and retirees voluntarily removed 5,300 ineligibles, bringing the total of wrongly insured people swept from the state rolls to more than 14,000.

The California Public Employees’ Retirement System administers health care coverage for more than 657,000 state employees, retirees and their dependents. So in context, only 2 percent were wrongly receiving subsidized health, vision and dental insurance.

Still, they were a hefty expense. Axing them saved the state more than $2 million per month in premium payments, according to a report prepared for CalPERS Board of Administration, plus $3.7 million each month in other medical costs such as hospital visits that the state doesn’t have to cover now.

The rule breaking was varied and could have been either honest mistakes or deliberate circumventions of the law. Some of the ineligible dependents were older than 25, too old to be carried on a parent’s plan. Others were former husbands, wives or domestic partners who remained on an ex’s insurance after a split.

The state law seems pretty clear: “‘Family member’ means an employee’s or (retiree’s) spouse or domestic partner and any child, including an adopted child, a stepchild, or recognized natural child.”

SB 98 takes it a step further by making the implicit painfully explicit: “‘Family member’ does not include a former spouse or former domestic partner of an employee or (retiree).”

The bill also requires that employers collect verifying documentation once every three years “to substantiate the continued eligibility” of spouses, domestic partners, children, stepchildren and kids of domestic partners.

For other children for whom “the state employee or state annuitant has assumed a parent-child relationship,” documentation will be required at least once each year.

CalPERS will collect the documentation from retirees.

What kind of proof will the state accept? Some examples: marriage certificates, domestic partner declarations, the front page of federal or state tax returns (redacting income info is OK), birth certificates, adoption certificates, legal guardianship court orders, day-care receipts or school records, tuition-payment records and auto-insurance policies.

Speaking of eligibility, another SB 98 provision prohibits Medicare-eligible employees, retirees and their dependents from remaining on the state’s medical insurance plans. No exceptions.

For decades, the state operated on little more than the pinky-swear system for determining whose dependents received benefits. No more.