The University of Virginia is auditing its health plan to remove ineligible employee dependents, a move that could clear 850 people from the school's insurance rolls at a projected annual savings of $1.8 million.
Many of the ineligible dependents are ex-spouses or children who've exceeded the age limit of 26 to remain on the university plan, said Susan A. Carkeek, UVa's chief human resources officer.
A pilot program that checked 10 percent of employees with dependents found 6 percent were ineligible.
By removing those 90 people, UVa made back the $120,000 cost of the third-party audit.
If the rate of ineligible dependents holds up among remaining employees, 858 people would be removed from the school plan.
“It’s a pretty high return on investment,” Carkeek said.
There are another 6,880 employees with 14,303 dependents to check, Carkeek said.
The employees must provide verification of eligibility by April 16. Follow-ups likely won't be completed until the end of the semester, Carkeek said.
The school health plan costs UVa about $135 million a year. Including employees without dependents, the plan covers about 14,000 employees and about 28,000 people overall, Carkeek said.
Employees are being asked to produce original documentation, such as birth or marriage certificates, for their dependents, Carkeek said.
Such audits are standard practice elsewhere but haven’t been conducted at UVa before, Carkeek said.
The state performed a large audit last year.
Carkeek summarized officials’ reaction to the school's pilot audit: “If that were the case on the whole population, we would be able to save a substantial amount of money.”
Carkeek said the move also helps cut costs for other employees and, in some cases, removes dependents the employees didn’t want on their coverage anyway.
“With all of the details and the trauma of a divorce, you might forget to drop someone off the plan,” Carkeek said.
As basic as those categories might seem, the university wouldn’t pick up on the ineligibility in the ordinary course of business, Carkeek said.
Natalie Edwards, a UVa staff member, said she was in the pilot group.
“It went very, very smoothly,” she said.
The administrators were friendly and cooperative, giving her extra time to submit paperwork related to her adopted daughter.
Faculty Senate Chairman George Cohen said the body is aware of the verification process, but has not yet discussed it.