Objective

To determine whether participating organizations and members are paying excessively for dual Empire Plan Family coverage. The audit covered the period January 1, 2014 through September 30, 2019.

About the Program

The New York State Health Insurance Program (NYSHIP) was established under Article XI of the New York State Civil Service Law (Law) for the purpose of providing health insurance benefits to State government employees, retirees, and their dependents. The Law also allows for the inclusion of other public employees in New York, including those of local government entities (such as counties, cities, and school districts) and public authorities (herein collectively referred to as participating organizations).

NYSHIP covers over 1.2 million active and retired State and participating organizations’ employees and their dependents (collectively referred to as members). The Empire Plan is the primary health benefits plan for NYSHIP, covering nearly 1.1 million members. The Department of Civil Service (Civil Service) is responsible for administering NYSHIP and determines NYSHIP’s administrative policies and procedures.

The annual cost for Empire Plan Family coverage ranged from $20,570 to $28,953 during the audit period. State and participating organization employers and members pay their respective share of those premiums. However, while participating organizations are required to pay a minimum employer share of the cost, some may pay a higher rate of contribution up to the full cost of coverage. The State does not allow two Family coverages for its employees; if a member and their spouse are both eligible to enroll in NYSHIP, only one may elect Family coverage (the other may either elect lower cost Individual coverage or waive coverage). Participating organizations, however, may allow for dual Family coverage, whereby each employee has Family coverage.

Key Findings

• We identified 696 employees and retirees of participating organizations with dual Family coverage during the audit period. The total cost of premiums to the members and participating organizations for the second Family coverage was $39,777,772.
• Participating organizations may be unaware that an employee has dual Family coverage because they do not have information to determine if a member is a dependent on another NYSHIP policy with the State or a different participating organization.
• As part of its administration of NYSHIP, Civil Service has not shared sufficient information with participating organizations to minimize waste and ensure efficiency for members and participating organizations of the Empire Plan. Participating organizations would benefit from additional information from Civil Service to help members make informed, financially sound health care decisions that would benefit both the member and the participating organization.

Key Recommendations

• Evaluate the feasibility of more effective information sharing with participating organizations regarding dual Family coverage, consistent with applicable laws and regulations.
• Work with participating organizations to educate members on the cost of dual Family coverage, including less costly alternatives such as buyback and opt-out programs.