University of Colorado Senior Associate Vice President and Chief Human Resources Officer Jill Pollock says 8,900 University of Colorado employees carry dependents totaling 17,200. The total coverage costs the university $100 million a year.
"Our consultant has indicated that a dependent uses about $2,000 to $4,000 a year in health care services," she said.
CU officials authorized an audit of the health care plan in an effort to identify unnecessary expenses. Employees received two months of advanced notice and had to fill out paperwork proving the eligibility of their dependents.
"This is a one-time 100 percent audit. We looked at the best business practices nationally and concluded that because our benefits costs are so much a part of our total compensation it would be useful for us to do this once in a comprehensive way," Pollock said.
Although some reports have identified the discovery of ineligible dependents as fraud, Pollock is resistant to use that word.
"There are various reasons that employees drop dependents," she said. "They may have dropped coverage because they just concluded that the person should not be covered anymore. They may have discovered that the definition of who could be a dependent didn't fit their earlier conception of what that should be."
Ineligible dependents will be dropped from the health and dental plans on July 1.
It is a move that could save the university $2 million to $4 million a year. The money is a drop in the bucket for CU's $2.6 billion budget, but it does help make up for the $121 million shortfall created by state budget cuts. That money has been backfilled by federal economic stimulus funds.
CU officials continue to look for ways to save money.
"It doesn't translate into dollar-for-dollar health savings. But in the long term it does. Long term it means that we pay less for health care," Pollock said.
Some ineligible dependents who will be cut in July may qualify for coverage under the federal health care reform plan. Those who do will be allowed to reapply for coverage.
Pollock says the university has developed practices that will help ensure that only eligible persons are covered. The audit could be repeated, in some form, every three years.
"These are initiatives that need to be taken," she said, "because their impact can be pretty significant."
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