CalPERS Dependent Eligibility Verification Saves System Millions
October 20, 2015
Communications & Stakeholder Relations
Brad W. Pacheco, Deputy Executive Officer
Contact: Bill Madison, Information Officer
SACRAMENTO, CA - The California Public Employees' Retirement System (CalPERS) today announced that its Dependent Eligibility Verification (DEV) project is complete and will achieve savings and cost avoidance close to $122 million.
Citing data as of September 1, 2015, CalPERS staff reported to the Board of Administration's Pension and Health Benefits Committee that the project resulted in more than 18,000 ineligible dependents being removed from employer-sponsored health care provided by CalPERS to state agencies, public agencies, and school districts contracted with CalPERS for health coverage. The projected savings will be in reduced employer health premium contributions as well as avoiding the cost of health care claims for ineligible dependents. The CalPERS DEV project completed the verification portion of the project on March 31, 2015.
"This has been a very successful project to ensure that we only have eligible dependents enrolled in CalPERS health plans," said Priya Mathur, chair of the CalPERS Pension & Health Benefits Committee. "The project and its expected cost savings are part of CalPERS' ongoing endeavors to help our employers and members manage their health care costs."
The CalPERS DEV project began in March 2013 with an amnesty period that ended June 30, 2013, during which employees and retirees could voluntarily remove ineligible dependents from their employer-sponsored health coverage. The system then used the contracted services of HMS Employer Solutions to conduct a nine-cycle eligibility verification process of state, public agency, and school district employees and retired annuitants. All active employees and retired annuitants enrolled in a CalPERS health plan were asked to provide specific documentation, based on dependent type, to verify that their dependents are eligible for health coverage.
"The number of ineligible dependents eliminated from health coverage amounted to just over 2.5 percent of the overall dependent population of more than 700,000, and eliminating those who were ineligible generated the success of the project," said Doug McKeever, CalPERS' Deputy Executive Officer for Benefit Programs Policy and Planning. "This translates into reduced employer-paid premium contributions and cost avoidance for those ineligible dependents, both of which contributed to the savings we projected."
McKeever added that CalPERS is also working to implement regulations that clarify supporting documentation requirements to support parent-child relationship claims for dependents enrolling in CalPERS health plans.
For more than eight decades, CalPERS has built retirement and health security for state, school, and public agency members who invest their lifework in public service. Our pension fund serves more than 1.7 million members in the CalPERS retirement system and administers benefits for nearly 1.4 million members and their families in our health program, making us the largest defined-benefit public pension in the U.S. CalPERS' total fund market value currently stands at approximately $295 billion. For more information, visit www.calpers.ca.gov.