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Pittsburgh on Track to Audit City Employees' Healthcare Dependents

Seeking to trim the fat off of the city's corpulent healthcare liability, Pittsburgh City Council gave preliminary approval to a bill that would launch an audit of the validity of all dependents enrolled in the city's health insurance plan.

At its committee meeting Wednesday, Council approved the $55,000 contract with a private firm in an 8-1 vote, the only "nay" coming from Councilman Rev. Ricky Burgess.

If it's finally passed on Tuesday, the audit by HMS Employer Solutions would require children's birth certificates, marriage licenses and other documentation from some 3,200 current city employees and thousands more retirees in order to prove their dependents belong in the system.

"We have almost 7,800 human beings on our healthcare," said Judy Hill Finegan, the city's director of personnel. "Are they all supposed to be there?"

Finegan said one of the most common instances of an invalid dependent comes when a city employee divorces his or her spouse and the change isn't caught by the personnel department. Employees' children are eligible for coverage until age 26, as per the Affordable Care Act.

Burgess said he voted against the bill because he went through a similar process in the past and simply didn't like the experience of having to prove the validity of his marriage.

"The burden of proof was on me to prove that I was, instead of the burden of proof being on them to prove that I wasn't," Burgess said. "I had done nothing wrong. I had not committed any problems, and it just bothered me that I had to prove that I was married."

If the legislation is passed, the city will send out a notice of the impending audit to all city employees and retirees, and then HMS will follow up with a request for documentation. Finegan said she expects at least 80 percent of employees to have no problem in responding to the company.

"If we don't hear back from you with your documentation, we would send you a reminder letter, (and then) we would send you a final notice letter," Finegan said. "Our mission is not to purge people from our healthcare who are entitled to it, but our mission is to find people that should no longer be on our healthcare."

HMS won out amongst eight bidders because the Texas-based company, which has performed similar audits for Orlando and the state of Minnesota, guaranteed minority participation in the contract at a "really good price," according to Finegan.

The city is liable for its current employees' health care and also the post-retirement health care costs of any police or fire personnel hired prior to the start of state financial oversight in 2004. When Act 47 oversight began in Pittsburgh, police and fire contracts no longer included retiree health care. Pittsburgh's total unfunded healthcare liability likely amounts to hundreds of millions of dollars.

Finegan did not say how much money Pittsburgh expects to save as a result of the inquest, but she noted that the audit should be completed before 2014.

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