Audit Causes Some Family Members of Minnesota State Workers to Lose Health Benefits

By Matt Dunning

Aug. 16, 2012

Thousands of family members of Minnesota state workers will be dropped from the state’s employee health benefits plan, state officials said this week.

Approximately 3,100 people were deemed ineligible for state-sponsored health care in a recent audit of Minnesota’s employee benefits program, a spokesman for the state’s Management and Budget Office confirmed. The audit required the state’s 30,700 employees to submit tax returns, birth certificates and marriage licenses as proof of their family members’ eligibility for coverage.

The audit was mandated by the provisions included in a broader budget agreement that ended a 20-day shutdown of Minnesota’s government in July 2011.

The 3,100 family members slated to lose their coverage represent 4.1% of the 75,000 dependents covered through the state’s employee benefits program. In an interview with Minnesota Public Radio on August 14, state Management and Budget Commissioner James Schowalter said the cuts were in line with predictions made prior to the beginning of the study in March, and that the state would save a projected $10 million as a result of the audit.

Schowalter also stressed that the audit’s findings were not to be interpreted as proof of fraudulent intent on the part of state employees or their dependents, noting that more than half those dropped from the benefits program—about 1,600 in all—were family members of employees who did not respond to the audit.

“It’s not fraud,” he said during the interview. “There are a whole lot of reasons why people may have intentionally or unintentionally responded to the audit.”

A spokesman for the state Management and Budget Office said it had not been determined what percentage of the dependents cut from the program were children, and that state employees would have the opportunity to resubmit proof of eligibility for dropped family members during the next open enrollment period in November.

The state will release a full report of the audit’s findings later this year, the spokesman said.

Matt Dunning writes for Business Insurance, a sister publication of Workforce Management. To comment, email

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Matt Dunning writes for Business Insurance.

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