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After almost two months of deliberation, an arbitrator ruled on Friday that the City of San Antonio has the right to find out if dependents that fire union members claim on their City health care plans are actually eligible to receive those benefits.
“It is common practice for employers both public and private to take steps to ensure that the individuals receiving benefits are eligible for coverage. This is especially true when taxpayers are funding those benefits,” stated Jeff Coyle, director of the City’s Government and Public Affairs Department in an email.
The City has relied on “passive enrollment” in the past to carry over dependents and benefits into the next year. But the “active enrollment” validation process requires providing legal documents proving familial/dependent relations like marriage licenses and birth certificates.
The dependent validation process is just one of many ways the City can control health care costs, Coyle said, which is currently a key issue in the more than 18-month, on-again-off-again contract negotiations between the City and police union. The San Antonio Professional Firefighters Association has yet to come to the bargaining table with the City, likely waiting to see what kind of deal the police union gets before agreeing to discuss its own.
The existing contract calls for no monthly premiums paid by union members or their dependents, a provision that City negotiators hope to remove from future union and police contracts. The City has proposed that dependents or members contribute at least a small monthly premium.
City documents estimate that it saves $870,000 annually based on a similar validation process in 2011 that was performed on civilian dependents. Once the San Antonio Police Officers Association complied in 2012, the City reported that a $160,000 in savings is realized each year. Over the years, millions of taxpayer dollars have been saved by requiring members to provide documentation that would demonstrate if dependents are eligible for benefits or not. Children age-out of their parents’ health care. Some people get divorces. Others find their own health care elsewhere. All “qualifying life events” that affect member health care plans are supposed to be reported to the City within 31 days but many have fallen through the cracks unreported.
Fire union President Chris Steele has told the Express-News that an appeal in state district court may be the union’s next step. The fire union had filed a lawsuit challenging the City’s right to validate dependents, but the case was moved to arbitration.
Union officials are concerned about the protection and handling of private records once submitted to the City – some members claim they’ve already provided documentation and the City has “lost” them. After review, the City claims there are 407 employees that have missing documentation for their dependents. “The total number of missing documents is 658,” states the ruling.
Perhaps the most glaring example of what kind of savings would come through an auditing process lies with Steele’s health care plan itself. Express-News columnist Brian Chasnoff reported in June that Steele still claims his ex-wife of several years as a dependent on his City health insurance plan.
Steele could not be reached for further comment by deadline.
In her ruling, Arbitrator Maretta Comfort Toedt stated there was nothing in the existing City-fire union contract, or collective bargaining agreement (CBA) that outlined union’s “freedom from audits” with regard to health care plans.
“Based on the language of the CBA and MCD (Master Contract Document), the City has the right to verify dependent coverage for already covered dependents,” Toedt stated. “To the extent that the City has the ability to seek such information, the City has the ability to terminate or discipline employees for failing to provide the information, subject to the provisions of the CBA. … In a proper case, failure to provide the requested information could result in termination of insurance coverage for the dependent of the employee.”
As stewards of taxpayers dollars, she emphasized that it’s the City’s responsibility to be transparent and carry out due diligence.
“There is a fiduciary duty here to ensure the proper expenditure of public monies,” she stated.
According to the report produced by the Healthcare and Retirement Benefits Task Force, police and firefighters in San Antonio earned total compensation packages that placed them among the highest in the state, with best-in-state health care and pension benefits.
“Dependent validation is not a new concept. In fact, these validations are viewed as a best practice among both the public and private sectors,” Coyle stated. “As far back as 2010, a major nationwide benefits survey found that about 70% of employers surveyed performed dependent validations.”
*Featured/top image: The first page of Aribtrator Maretta Comfort Toedt’s ruling.
Read all the stories on the City and police union negotiations in the Rivard report archive.