Benefits shift saves San Francisco $2 million 

Facing the threat of paying hefty penalties, more than 1,000 city workers dropped ineligible dependents from their health benefits.

The removal of family members and dependents that no longer legally qualify for city medical coverage saved more than $2 million.

In an effort to crack down on dependents illegally having their health benefits premiums paid for with city dollars, an amnesty program was created for the month of April with a warning that if ineligible dependents are found afterward, penalties could be pursued.

In fiscal year 2008-09, there were 59,750 total members, including retirees, receiving health benefits with 47,531 dependents, for a total of 107,281 beneficiaries. The City’s health and dental premium contributions for active employees total $313.9 million this fiscal year.

There’s an effort under way to have city employees pick up more of the health premium costs, as The City is looking at closing large deficits in the coming years and as health costs rise.

Employee monthly contributions vary depending on which of the three offered benefit plans the worker enrolls in, the union the worker belongs to and the number of dependents. Contributions range from zero for a worker with no dependents to $545.86 per month for a worker with two or more dependents, while The City’s contribution can range from $593.74 a month to $1,132.54.

Three years ago, The City spent $148 million in health premiums for city workers and their dependents, which is expected to increase to $458.3 million for fiscal year 2013-14.

More than 1,016 public employees dropped 1,334 ineligible dependents from medical coverage and 769 members dropped 951 dependents from dental coverage, according to a report from Catherine Dodd, a director of the Health Service System.

The savings are substantial, estimated at $2.3 million a year if ineligible dependents remained on the rolls and wrongfully received the benefits. The totals include 750 city workers who dropped 1,011 dependents, which included ineligible spouses, children and stepchildren. It’s unclear how long the dependents were wrongfully receiving benefits.

The rules require workers to notify The City as soon as a dependent becomes ineligible. If not, the worker could be forced to pay the costs dating back to the point when a dependent first became ineligible.

jsabatini@sfexaminer.com


Results of amnesty program

1,016 Members who dropped 1,334 ineligible dependents from medical coverage

769 Members who dropped 951 dependents from dental coverage

750 City employees who dropped 1,011 dependents


Savings

$193,957.44 Monthly, or $2,327,484 a year


Breakdown of savings

$1.8M Annually for city and county of San Francisco

$368,796 Annually for San Francisco Unified School District

$65,172 Annually for City College

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