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SGIP Review Saves Taxpayers Millions

Currently, enrollees in the state group health insurance plan register eligible dependents (spouses and children) through a passive enrollment process which allows employees to roll over their benefits from year to year without requiring them to assess their plan options or learn more about their benefits. As a result, many ineligible dependents continue to receive benefits.

A 2014 report by Florida TaxWatch’s Center for Government Efficiency  recommended that the Legislature appropriate funding for a comprehensive audit of eligibility status of dependents covered under the State Group Insurance Program (SGIP)to avoid unnecessary costs paid for ineligible recipients.

This recommendation was echoed in a June 2016 report by the Constitutionally-mandated Government Efficiency Task Force, which recommended that the Legislature appropriate funding for a comprehensive audit of eligibility status of dependents covered under the SGIP and switch from a passive enrollment process to an annual active enrollment process to avoid unnecessary costs paid for ineligible recipients. The Task Force estimated that, based upon the average annual per dependent cost and average dependent enrollment for plan year 2014), every 1 percent of dependents found to be ineligible would save the state an estimated $8.7 million. Based on the industry average of 8 percent of covered dependents in a given plan found to be ineligible, the dependent eligibility audit would save the state an estimated $69.6 million annually.

The 2017 Legislature authorized the Department of Management Services to use the unexpended balance of funds from the State Employees Health Insurance Trust Fund for the procurement of a third-party eligibility verification service to perform the dependent eligibility audit. With the audit nearing completion, the Department of Management Services reported today that 1,825 ineligible dependents have been dropped from the SGIP, saving close to $9.5 million.

TaxWatch commends the Legislature and Governor Scott for acting on the recommendation of TaxWatch and the Government Efficiency Task Force to remove ineligible dependents from the state health insurance program.

In January 2019, the Governor, Speaker of the House, and President of the Senate will once again appoint members to the Government Efficiency Task Force. TaxWatch looks forward to working with the 2019-20 Government Efficiency Task Force to identify opportunities to improve the efficiency of government operations and reduce the costs of government.

 

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