Lax verification policy raises questions

The state of Washington spends about $1 billion a year to provide health care coverage to employees, retirees and their dependents.

For the first time, officials at Washington’s Public Employees Benefits Board are auditing 330,000 accounts to determine client eligibility. If the experience of Montana, Boeing, Weyerhaeuser and others holds true here, about 4.5 percent of those receiving benefits are ineligible and will be dropped from the state-subsidized health insurance program.

“We’re making sure people receiving benefits are actually eligible to receive those benefits,” said Dave Wasser, a spokesman for the state Health Care Authority.

Wasser had no estimate of the dollar savings the state hopes to accrue. He said the agency will spend $247,000 to do the eligibility audit and if the search proves fruitful and weeds out an estimated 6,700 ineligible dependents, the state may repeat the verification process every few years.

A four-page letter was sent to 81,000 employees and retirees asking each to return proof of eligibility of their dependents. They have until Nov. 30 to respond with the requested documents. Subscribers who don’t respond will receive a follow up letter. If employees still don’t reply, their payroll office will be brought into the process and employees will be contacted in person or via e-mail. Those who are dropped have a right to appeal through the agency.

While state officials say they are following “industry standards” in requesting tax and Social Security records, some state employees are rightfully concerned about the privacy of their information. There are additional concerns about the application of the rules and how the state will verify the accuracy of the information submitted by clients.

Several years ago, a state audit suggested the Health Care Authority verify whether student dependents are truly eligible for health benefits under state guidelines. Instead of looking at just students, the benefits board has chosen to verify the eligibility of all dependents. Spokeswoman Mindy Chambers said the state auditor never asked the Health Care Authority to require tax information or subscribers’ Social Security numbers.

But that’s precisely what the benefits board has asked for in a list of documents it will accept for verification purposes.

A married couple, for example, is encouraged to return the cover sheet of their 2008 income tax return — blacking out financial data, but showing both names as proof of marriage. The state’s form says, “Please include your social security number on each of the documents.”

Yet those with privacy concerns who call the Health Care Authority are told they can blank out their Social Security number or, as an alternative, can blank out all but the last four digits.

So are Social Security numbers required or not?

Health Care Authority spokeswoman Michelle George said, “When subscribers black out their Social Security number this delays the processing of the documents. If we only receive the last four digits, it requires additional staff time to match the documents to the correct subscriber’s account. To minimize processing time, subscribers need to include their full SSN on their documents.”

But apparently that’s not a hard and fast rule. George said if a subscriber has privacy concerns about mailing documents containing their full Social Security number, then the last four digits will do.

As an alternative to the tax statements, couples are encouraged to provide a marriage certificate and one of the following: a mortgage note or lease agreement, proof of a shared bank account or a utility bill.

When asked about agency policies to verify the accuracy of the documents provided by subscribers, George said, “PEBB believes that most subscribers do not choose to intentionally defraud their employers. Additionally, our research indicated that it is industry practice to accept documents such as a birth certificate or federal tax return form as valid proof of a dependent’s eligibility. For these reasons, the PEBB program will accept copies of these documents as valid and accurate.”

In other words the agency won’t be doing any independent verification.

That’s troubling.

As for the confidentiality of the tax return and Social Security numbers, Wasser admits, “People are concerned about this. ... We are taking all the steps we can to ensure that these (tax forms) will be destroyed once we get the information, and (we are) encouraging them to redact the sensitive information themselves before sending it to us.”

It’s sound fiscal policy for the state to verify the eligibility of dependents on the state-subsidized health insurance program. But agency policies leave lots of unanswered questions about the validity of the information and how sensitive data will be protected.

“Trust us,” from government officials, is tough to swallow.