With their revenues declining and prospects for replacing them fading, colleges and universities around the country are embracing a series of tactics aimed at lowering their costs, such as redesigning entry-level courses and pruning unproductive research institutes. The measures aren't always popular, especially when they are perceived as taking cherished benefits away from employees.
That's the case in Georgia, where the state's public college system has undertaken an audit designed to ensure that health insurance coverage goes only to those who are qualified to receive it -- and to shave as much as $4.6 million off the $290 million that the University System of Georgia spends each year on employer-provided benefits. The so-called dependent eligibility audit, after an "amnesty period," requires all employees whose dependents are covered under the health insurance policy to submit documents (such as marriage licenses, birth certificates and tax returns) proving that their spouses and children warrant such coverage.
Employee groups in the Georgia system have not taken kindly to the audit. Viewed in isolation, said Hugh Hudson Jr., a Georgia State University historian who heads the state chapter of the American Association of University Professors, the idea of requiring faculty and staff members to prove that they're following the system's current policy may seem like no big deal.
But much else is happening in Georgia, Hudson said. State political leaders are imposing major budget cuts on public colleges, promising furloughs and threatening layoffs of tenured faculty members (a threat from which the university has since backed off), and legislators have taken aim at what they perceive to be the inappropriate research interests of some professors.
In that context, "we're told, 'Prove to me that you haven't been cheating.' This is the proverbial straw breaking the camel’s back." It's hard not to view the current review of benefits, Hudson said, as "part of a larger sense of growing hostility toward the value of higher education and the faculty."
Officials of the Georgia system insist that such a view seriously misreads their intent. While such audits typically find that between 5 and 10 percent of enrolled dependents should not be covered, the overwhelming majority are enrolled because of mistakes or incomplete understanding, not ill intent.
And it is just good fiduciary practice to limit health insurance to those who are actually qualified to receive it, they say -- a point of view shared by the increasing numbers of colleges and universities that are undertaking such audits.
“Many colleges and universities have recently conducted similar audits and are realizing significant annual cost savings -- some in the millions of dollars per year," Andy Brantley, president and chief executive officer of the College and University Professional Association for Human Resources, said via e-mail. "These kinds of audits are not meant to be an invasion of privacy and are only conducted to verify information previously submitted by the employee.... All institutions should regularly conduct these types of audits as a standard business practice.“
The university system's Board of Regents approved the audit in March, as one of a series of changes it had undertaken in the preceding months (at large part at the direction of its new chairman, Robert F. Hatcher) to shave costs from its health care programs.
"What we're trying to do is to preserve our health care plan for the people on the plan," said Wayne Guthrie, vice chancellor for human resources for the Georgia system. The dependent care audit is one way to do that, system officials said in documents explaining the plan, since "[c]overing individuals who are not eligible dependents raises our cost for health coverage which is reflected in the annual premiums."
The audit is being conducted by Chapman Kelly, an Indiana-based firm to which the regents agreed to pay about $300,000. (The expenditure of funds to an outside company given the state's tight budgets has also raised faculty hackles, said Hudson of the AAUP. "Is there no agency in the state that could do this work?") The review includes a weeks-long “amnesty period ... in which employees may voluntarily remove ineligible dependents with no penalties," the system told employees in its communications to them. (Employees were notified of the amnesty phase on March 29 and given until April 21.)
After that phase, Chapman Kelly contacted all other employees with dependents on the health plan on April 30 to require them to send documents to "prove their dependents’ eligibility." The process includes a mechanism for appeals, but when it is over, dependents found to be on the health plan despite being ineligible are to be dumped from the plan. Despite the talk of "penalties" for those who don't come forward in the amnesty phase, there are no significant consequences (beyond the loss of dependents' insurance) for those discovered later.
System officials say they understand why some employees might bristle at being asked to provide conclusive evidence that they are still married or to prove that their children are still of appropriate age to remain on the health plan. "I wish we didn’t have to ask people for proof they were still married," Guthrie said. But the results of the audit's amnesty phase affirm the logic behind the audit, he said: Employees came forward to identify 633 dependents, at a projected savings of $1.26 million, who no longer qualified for the health plan.
That doesn't surprise Guthrie, he said, given the inevitable complications of our lives these days. "When you get a divorce, one of the last things you might think of doing is removing your spouse" from your health plan, he said.
Communication is Key
Guthrie acknowledges that the Georgia system is part of an "early wave" of higher education institutions going the insurance audit route, which is standard operating procedure in the corporate world; Norman Jacobson, a senior vice president at Sibson Consulting, a human resources firm, estimates that roughly 10-20 percent of colleges and universities have taken such a step.
Jacobson projects that many more will eventually do so (and suggests that they should), primarily because it makes good financial and fiduciary sense. But for the early adopters in higher education like Georgia, it's inevitable that anything that could take away a benefit at a time when employees are struggling financially will be a "high-sensitivity" issue.
Given that understandable sensitivity, "you could do everything right, have the perfect process, and still have angry people," said Jacobson. "There's always going to be someone who feels, 'I've been married to my wife for 25 years, why in the world are you asking for a marriage license?' "
But even if a good process can't eliminate all gripes, it can make a difference, he said.
"You have to be very careful in how you communicate," Jacobson said. Employees sometimes respond more favorably to internal reporting than to sending their tax returns and other sensitive documents to outside vendors. Institutions should try to get as much buy-in upfront from campus constituents as possible, and audit processes should make it as easy as possible to submit documents.
And language matters, too, he said, noting that Segal Sibson, in its own audit programs, tends to avoid using words like "amnesty," which (given its common uses regarding tax scofflaws) tends to reinforce the idea that those who participate in it have done something wrong.
Jacobson said he suspects increasing numbers of colleges and universities will ultimately adopt audits like the one Georgia has put in place, mostly because doing so will be necessary in order to maintain their current benefits for employees. "If I can tell employees, 'Doing this will mean you get to keep what you have, or we won't have to lay off your colleagues,' they may be more likely to see it as being to their benefit."
Search for Jobs