May 7, 2013
External Affairs Branch
Robert Udall Glazier, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
Contact: Bill Madison, Information Officer
CalPERS Reviews Health Enrollment Rosters for Ineligible Dependents
Dependent Eligibility Verification project will help contain cost increases for members and employers
SACRAMENTO, CA – As part of its continuing effort to control rising health care costs, the California Public Employees’ Retirement System (CalPERS) has begun a Dependent Eligibility Verification (DEV) project to validate that only eligible dependents are covered under CalPERS health care plans.
As part of the project, active and retired health plan subscribers are encouraged to remove ineligible dependents voluntarily from their coverage during the current amnesty period, which runs now through June 30, 2013. Beginning in July, all subscribers will be required to provide supporting documentation to verify that their dependents are eligible for CalPERS health benefits. During the verification period, subscribers will be notified by Health Management Systems (HMS), an outside partner CalPERS engaged for the project, about the documentation needed to support their dependents’ eligibility for health coverage and when and how to provide it.
“Some of our members may not even realize that one or more of their dependents are no longer eligible for coverage,” said CalPERS Deputy Executive Officer Ann Boynton. “We have worked to minimize the documentation that will be required and hope that our members understand this is part of our overall efforts to help reduce health care cost increases.”
“The verification process directly benefits members, the State and our public agency and school employers by eliminating costs of providing health care benefits for those who do not meet CalPERS health care enrollment criteria,” Boynton added.
Subscribers with ineligible family members still enrolled in their health plans during the verification period may be held liable for health care costs incurred while the covered dependent was ineligible. G.C. section 20085 makes it a misdemeanor to knowingly make a false statement to the System for the purpose of improperly obtaining a benefit, including falsely representing family relationships. The same statute also provides that a person convicted may be required to make restitution to the System.
So far, the amnesty period has resulted in the voluntary removal of 1,650 ineligible dependents from health coverage, resulting in an estimated cost avoidance of more than $7 million for State, public agencies and school employers.
Dependents eligible for coverage under an employer’s health plan include:
- Current spouses or registered domestic partners
- All children up to age 26 if the member is considered a primary care parent.
Ineligible dependents include:
- Former spouses or former registered domestic partners
- Children age 26 or older
- Children of former spouses or former registered domestic partners
- Live-in boyfriends or girlfriends and their children.
The CalPERS Board of Administration approved verifying dependent eligibility in 2012 as one of several Health Benefits Purchasing Review initiative strategies to help CalPERS continue delivering sustainable health benefits to its members. This innovative approach to identifying ineligible dependents is a way to help contain cost increases for members, the State and other employers in the CalPERS Health Benefits Program. The law does not allow ineligible family members to be covered under a subscriber’s health plan.
CalPERS is the nation’s largest public pension fund with approximately $260 billion in assets, administering retirement benefits for more than 1.6 million members, and spending over $7 billion annually to provide health benefits for more than 1.3 million State, public school, and local public agency employees, retirees, and their families. For more information about CalPERS, visit www.calpers.ca.gov.