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August 13, 2008

Breaking news of your divorce...to your employer

Even after the ink is long dry on divorce papers, some government workers illegally continue to list former wives, husbands and stepchildren as dependents on their health insurance policies.

"That's any health insurance program's biggest area of abuse," says David Ernst, a spokesman for the state Department of Civil Service.

This fall, the department will hire an outside consultant to audit family policies to determine if dependents are eligible for health insurance. The New York State Health Insurance Program (NYSHIP) covers 1.1 million state and local government employees, retirees and family members. In June, the department issued requests for proposals. It now is evaluating two qualified bids.

No one knows how many ex-spouses, ex-domestic partners, ex-step kids and adult children benefit from the failure of employees to notify personnel offices of their altered marital or domestic status.

Apparently, the practice is widespread enough that Ernst says, "We expect the project will more than pay for itself in sayings."

The state budget authorized the Department of Civil Service to implement a 60-day amnesty period, during which time enrollees will be able to correct and update the status of dependents eligible for family coverage--without penalty.

The amnesty program will begin in the late fall, says Ernst, adding "People also could fess up now."

If enrollees are later audited and found to be falsely claiming a dependent, they could face disciplinary, civil or criminal action. That could require enrollees to reimburse the state retroactively for the cost of insuring any "ineligible dependents".

Yesterday's blog, Insuring ex-step kids?, reported the Office of State Comptroller audited health insurance plans of six public authorities. It found five authorities failed to adequately document the eligibility status of individuals covered under family plans.

Posted by Lise Bang-Jensen

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