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Posted on Thu, May 19, 2011 : 10:03 a.m.

Ann Arbor schools remove 200 ineligible dependents from health plan

By Cindy Heflin

The Ann Arbor school district discovered last year that it was providing health insurance for 200 people not eligible for health-care coverage as employee dependents, Michigan Capitol Confidential reports.

The ineligible dependents were immediately removed from the district's health-care plan, the report said. District spokeswoman Liz Margolis said the the district hired a private company to review its dependent coverage last year, according to the article.

Michigan Capitol Confidential is an editorial arm of the Mackinac Center for Public Policy, a Midland-based think tank.


Lisa Starrfield

Sat, May 21, 2011 : 7:23 p.m.

As the article claimed, the district failed to ask for an annual list of dependents. I know I had only listed my dependents upon enrolling and the birth of my second child before this audit. Many employees have been in the district a long time and it is not unreasonable that changes in family life didn't get updated on these forms due to the fact we were never asked. In the midst of a divorce, would you really remember to update your health insurance form? When a child ages out of the system, wouldn't you expect them simply to be dropped? I don't think this was 200 cases of fraud but merely a system error. It has been corrected. Oh and as for the cost, I believe (could be wrong), that the insurance is for a family, not a given number of individuals.

Lisa Starrfield

Sun, May 22, 2011 : 3:55 p.m.

The union has nothing to do with administration.


Sun, May 22, 2011 : 3:23 a.m.

union sanctioned incompetancy is what you are implying. All from an educated constituantcy. so are they stupid, crooked, unqualified, or just plain lazy?

Lisa Starrfield

Sat, May 21, 2011 : 7:17 p.m.

That some children and spouses were not removed even though they are no longer eligible due to age, divorce, what have you is not evidence of fraud. I would guess in most cases that it is an artifact of the system. It is sad that so many are rushing to think the worst of our community's teachers.


Sun, May 22, 2011 : 3:21 a.m.

you mean like the unions accusing folks of "destrying the middle class"?


Sat, May 21, 2011 : 6:20 a.m.

Absolutely amazing the stuff coming out these days now that we're paying attention. We need to pay a whole lot closer attention and start cleaning this crap up and putting controls and criminal penalties in place with some teeth. It should hurt to steal and betray the public's trust. Aiding and abbetting is just as bad. If you knew about a fraud, you're just as guilty.


Sun, May 22, 2011 : 3:28 a.m.

How about any profession that needs "going after" if they are wasting taxpayer dollars, defrauding the government, consumers, or abusing their position of authority. Does that sound fair to you sh1?


Sun, May 22, 2011 : 3:19 a.m.

Oh wait Genetracy...maybe you mean GM Chrysler B of A, Aig, public unions, or Morgan Stanley? Please clarify.


Sat, May 21, 2011 : 4:01 p.m.

How about welfare recipients?


Sat, May 21, 2011 : 1:28 p.m.

What profession do you suggest we go after next?


Sat, May 21, 2011 : 6:11 a.m.

Spyker, I'm confused . So you chalk this up to low cost labor and incompetance and then add that it doesn't make a difference anyway. I chalk it up to fraud and would bet that if a few folks went to jail it wouldn't happen as often. Alabama convicted a mother for falsifying a residence address, I think we should bring criminal charges (not diciplinary action) against those claiming "false" dependents. Your situation may not warrant it but then you can't speak for all cases, now can you? I'll calm down when a full investigation is made and your comments can be independently verified.


Fri, May 20, 2011 : 2:10 a.m.

Was failure to reply to the mailing assumed to be fraud? It seems so unless I read incorrectly.


Sat, May 21, 2011 : 1:27 p.m.

@snapshot, the point is how do you know why someone didn't respond?


Sat, May 21, 2011 : 6:16 a.m.

If the failure to respond hid an unauthorized enrollee, then yes it's fraud. Stealing is stealing.


Fri, May 20, 2011 : 12:58 p.m.

In reading everything I can find, I don't know. I do know there was no verification required to sign someone up. Whether they took people off for lack of response from the employee is unknown.


Fri, May 20, 2011 : 12:43 a.m.

The audit was done by an extreme right wing anti-government anti-union anti-teacher organization, the Mackinac Center for Public Policy. If the audit was done by a creditable organization, it would be something to get excited about, but, it wasn't.


Fri, May 20, 2011 : 12:56 p.m.

Nope - The article was written from Information that came from the Mackinac Center for Public Policy. They were tipped off by a former AAPS employee. The firm that did the work is unknown. I have checked the on-line information at the AAPS website and they have yet to post the information on who they paid for what in the last year. This of course is contrary to BOE policy.


Fri, May 20, 2011 : 11:44 a.m.

I hate it when those right-wing zealots uncover left -wing waste!!!!! (Or vica-versa)


Fri, May 20, 2011 : 12:22 a.m.

Only 806 more Michigan State school districts left to audit. Wonder how much more money is being stolen in this scam across the state - $100 million per year?


Thu, May 19, 2011 : 8:21 p.m.

What was wrong about my comment of penalizing these employees by deducting amount from their wages in installments and then firing them for acting immorally? Why was this comment deleted? If the employee is found guilty then shouldn't the logical punishment be to recover the amount spent due to fraud and then fire them for cheating the system? In what way does this violates the conversation guideline of

Jen Eyer

Fri, May 20, 2011 : 5:18 p.m.

Actually, most of the comments contain qualifiers that allow for the possibility that not everyone *intentionally* claimed ineligible dependents.


Fri, May 20, 2011 : 5:14 p.m.

Jen, most of the comments to this article assume the employees are guilty.

Jen Eyer

Fri, May 20, 2011 : 1:52 p.m.

Your comment assumed that all of these employees were deliberately guilty. In fact, much is still unknown about why this occurred.


Thu, May 19, 2011 : 6:15 p.m.

This is one example where diligence can save a lot of money! I agree - people who knew they were cheating should be punished AND made to pay back the $$$ spent.


Thu, May 19, 2011 : 6:13 p.m.

Why are there so many negative comments? AAPS found a problem and corrected it. Good Job AAPS! Thanks You.


Thu, May 19, 2011 : 5:40 p.m.

This has to be more than $100K. Can verify the costs associated with this? Thank you.

Rob Pollard

Thu, May 19, 2011 : 5:17 p.m.

Interesting that allows comments such as "Fraud" or "immoral act" - is there evidence that there was fraud? If so, how much of it? Insurance plans are notoriously complicated and many people, after their initial sign-up, don't even look at it unless compelled by some serious illness or their employer (e..g, there is a plan administrator change and you have to select amongst two new options). Thus, I would guess there was some fraud, but I have no idea if that # is 2 out of the 200 or some much higher number. Also, it would be good to now how much money incorrectly spent by the AA District because of this. Is it 200 x 1,000? x 16,000? Some other number? That would give an idea of how much of a problem that it is out of a ~$200 million budget.


Thu, May 19, 2011 : 6:16 p.m.

Nice try, Rob, but people should know who their eligible dependents are.


Thu, May 19, 2011 : 4:48 p.m.

Roughly 3000 employees - 200 ineligible dependents. So if each person who had an ineligible dependent only had 1 - 14 out of 15 employees were honest about their health care. In some cases it can be hard to know, given the rules, whether someone is or is not eligible. In other cases people can move between categories during a plan year. So some percentage of the problems were rules issues or changes in eligiblity. AAPS caps for teachers Health Care at $12,153 (roughly per the contract amendment) per year that the schools pay. Beyond that it is on the employee. Unless an employee moved from single to family because of an ineligible dependent, I doubt it cost AAPS much money. It may have cost employees money. In the long run though the higher cost to provide services would have increased the premiums for all participants. That the HR department at AAPS could not do this screen is a problem. They have "top notch" professionals serving the AAPS community. One would think that the ADMINISTRATION would be capable of doing this in house. I would not be surprised that when it is all said and done the cost of hiring the firm to review the dependents exceeds the cost of ignoring the problem for this year. In the long run, I think it is a good thing that it was done, since in the long run it would have increased the overall premiums. It is really time to consolidate HR, Accounting and other back office functions for the 10 county school districts.


Fri, May 20, 2011 : 11:42 a.m.

Good Lord! Their 'cap' is three times what my employer pays. And my taxes go to this?


Fri, May 20, 2011 : 12:08 a.m.

Moonmaiden - Have you ever read some of the rules that are in policies? In some cases having an 18 year old in the military, is still a dependent and in other cases it is not. The number of days someone has been out of school comes into play as well as disability and other considerations. Then there is the "Health Care Reform Act" and its changes in who is eligible. I would like to give people the benefit of the doubt, rather than brand them all cheaters.


Thu, May 19, 2011 : 6:18 p.m.

Come on, Don, people should be smart enough to know who their (legal) dependents are.

Bradley Pearsall

Thu, May 19, 2011 : 4:39 p.m.

David/Spyker, yes these people may not be costing the district extra money now but when the insurance company raises rates to cover the cost of all of these extra people it will hurt the district and its employees who have to carry the cost. Bottom line they should have been off the lists no matter who is responsible and those responsible should be dealt with.

Lisa Starrfield

Sat, May 21, 2011 : 7:25 p.m.

The amount the district pays for health insurance is capped by contract. Our rates went up this year and the teachers are paying the difference in the premiums, not the district.


Thu, May 19, 2011 : 4:39 p.m.

FOIA........ It would interesting to know who the miscreants are and what the circumstances are. Of course, this would require actual investigative reporting....which does not happen in The Duece least not on this website.


Thu, May 19, 2011 : 4:33 p.m.

The insurance premium paid for a family does not depend on the number of dependents. 1 kid or 10 kids is the same premium so I doubt this was costing anyone a lot. That said, a better job of verifying eligibility could be done.


Fri, May 20, 2011 : 10:41 a.m.

Not necessarily correct. An older child can cost more... Any teacher that does this knowingly should be fired.


Thu, May 19, 2011 : 4:43 p.m.

The insurance premiums only represent part of the costs, Alan. If the ineligible members had numerous or expensive claims during this period, it drives up the cost of health care which will incur more costs for the district and taxpayers.


Thu, May 19, 2011 : 4:11 p.m.

The district hired a private company to review its dependent coverage? Are you seriously telling us they are incapable of doing so? If that is the case fire the HR department and start over.


Sat, May 21, 2011 : 6:40 a.m.

We need to keep scrutinizing costs through independent audits. It seems that those assigned to guard the public trust can't be trusted.


Thu, May 19, 2011 : 10:51 p.m.

Agree 100% on that.

David Briegel

Thu, May 19, 2011 : 4:01 p.m.

It took 15 posts before someone spoke rationally about this subject. Thank you squidlover and Spyker. Obviously management failed in their responsibility to manage. Furthermore, this is only an issue because America refuses to join the civilized world and provide health care for our citizens. All this chest thumping to proudly accomplish the noble task of denying health care to our fellow citizens. Makes me feel all warm and fuzzy!


Sat, May 21, 2011 : 6:38 a.m.

So after a full investigation, and if fraud was committed, you would also advocate criminal prosecution, termination, and forfeiture of pension?


Thu, May 19, 2011 : 3:44 p.m.

Calm down folks. My employer requires me to identify eligible dependents annually. Each year I attempt to remove my obviously no longer qulaified 30 year old son. Each year the account reps I talk to on the phone (after failing to be able to do this myself on-line) tell me they can't do remove him either. Each year I am told no claims would be approved for him (none are ever submitted), and they record my attempt to remove him, yet he is still on the rolls! This has been going on for five years, the "benefit" of an employer hiring the least costly plan management company they can find. My wife's employer never asks questions regarding eligibility of insurance plan dependents. The District never said how much was paid out last year as claims for these ineligible dependents - if any. The $16K per year is a typical annual cost for a comprehensive plan that covers an entire family. Does removing these ineligible dependents decrease the insurance premium, or is there no savings because the employee still has other eligible dependents? Obviously some house-keeping of eligible dependents was needed, and should continue on an annual basis, but this may reflect more on an inattentive employer than fradulant employees. But most likely it involves both categories.


Sat, May 21, 2011 : 6:33 a.m.

Illegal "perks" protected by "plausible deniability and the union rational". A system that has outlived it's usefulness.

Corey Lord

Thu, May 19, 2011 : 3:55 p.m.

Why should we calm down?!? The districts and the MEA are complaining about cuts from the state so in order to find better ways to save money, this type of thing should be done. Its one thing for private sector employers to provide insurance coverage and that insurer doesn't follow the rules but its a whole different thing when you're dealing with public funds during a time when those funds are looking to be cut.


Thu, May 19, 2011 : 3:36 p.m.

First, I would be interested to learn exactly how these individuals were ineligible. I know that for many health plans, additional steps are required to retain eligibility of benefits (for example, if a dependent just became a full-time college student). Knowing this information should make it clearer if fraud was intentional (not excusing the act if it wasn't) and if disciplinary actions are called for. Secondly, as a person who spends a fair amount of time dealing with billing insurances, I often see the insurances issuing audits and requiring prior authorization before paying for many claims (especially expensive ones). How, then, did this go unnoticed for so long?


Sat, May 21, 2011 : 6:36 a.m.

Your scenario doesn't make sense because dependents can be covered until age 26 now. College students were usually covered anyway while in school so I don't see your logic other than creating "plausible deniability".

Corey Lord

Thu, May 19, 2011 : 3:34 p.m.

When was the last time an audit was done like this? If it hasn't been done in a while maybe they should think about doing it more often because clearly our school employees have no care about the education budget so we need to keep an eye on them so they don't take advantage of their precious funds.

Tony Dearing

Thu, May 19, 2011 : 3:34 p.m.

A comment has been temporarily removed while we check the accuracy of information contained in it.

Rork Kuick

Fri, May 20, 2011 : 3:35 p.m.

Comments here are very often inaccurate. That's how they get more votes, I've noticed. I thought it was a tradition.


Thu, May 19, 2011 : 7:02 p.m.

How long does it take to check the accuracy of a comment. Do all comments have to be 100% accurate? If I feel a comment is not accurate, should I report it as abuse?


Thu, May 19, 2011 : 5:41 p.m.

What's the cost Tony? Do the homework please.


Thu, May 19, 2011 : 3:32 p.m.

Will restitution be made?


Fri, May 20, 2011 : 1:16 p.m.

This should be the first order of business, then discipline!


Thu, May 19, 2011 : 3:31 p.m.

@Paul- I think your $16K "per dependent" is an error.


Thu, May 19, 2011 : 4:26 p.m.

Alan, The comment was based on costs from this article. Where a teacher was quoted &quot;20% would cost her 4K a year&quot; which would mean her total health care is 20K total. When you take 20% of that that AA teachers pay (it might actually be less than 20%), but if it is, brings the cost down to 16K a year savings for the city. <a href="" rel='nofollow'></a>|topnews|text|FRONTPAGE


Thu, May 19, 2011 : 3:30 p.m.

Of course those that think we should provide benefits to domestic partners shouldn't have a problem with this as long as the individual lives in the employee's house and the employee provides at least 51% of the individuals needs.


Thu, May 19, 2011 : 6:22 p.m.

The point is - following the existing rules. Sorry folks, they are not difficult for educated people to understand.


Thu, May 19, 2011 : 3:26 p.m.

Wondering how can we expect morality in children who have been educated by immoral teachers?


Thu, May 19, 2011 : 6:23 p.m.

I no teacher ever gets a traffic ticket . . .


Thu, May 19, 2011 : 3:09 p.m.

Are these the same people that are educating our children? Complaining about cuts to education? It looks like we can cut more money from education without destroying the education system if we just look a little harder!


Thu, May 19, 2011 : 3:09 p.m.

Jeez, perhaps - all districts - should do a similar audit.


Thu, May 19, 2011 : 2:48 p.m.

Are the unions OK with this? LOL!


Thu, May 19, 2011 : 2:38 p.m.

I hope any employees who are found to have knowingly added such ineligible dependents are disciplined.