State workers say they unfairly lost health benefits

At least 20 state employees and the state's largest public employee union are complaining that the state's decision to cut off 3,100 people from the state health insurance program is overreaching.

An audit of state workers and their dependents found that 4 percent of dependents enrolled in the state health insurance program for employees are not eligible. However, many of those people were wrongly terminated from the program, say union officials and state workers.

Some of the state employees and their family members who lost their benefits say they are frustrated by their loss of health insurance, and believe they took all of the steps to ensure that coverage should continue.

Hugh Killam, whose wife teaches at Minnesota State University Mankato, said he received notice earlier this month that he lost his health insurance, despite his 20-year marriage.

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Killam said he and his wife provided the marriage license and birth certificates required to prove that he and his daughters are eligible for state health insurance. He said the company conducting the audit requested additional information, which Killam said was sent in on time. Despite that, Killam said he received notice that he is no longer eligible.

"Something was missing or something was received late. We're still trying to find out," Killiam said.

He said his children will continue to receive health insurance through the state, but he has been forced to pay for his current plan on his own.

"I'm not saying we may not have done something wrong but they're basically denying us coverage for what comes down to a paperwork error, which cost us $2,500," Killiam said.

He is one of 3,100 people who lost their health coverage as result of the audit. The audit is aimed at rooting out fraud and was included in last year's budget deal to end the state government shutdown.

Eight state workers and family members of state employees who contacted MPR News say they are not ripping off the state, but say that they were disqualified because they did not supply the necessary paperwork, were not contacted about the audit or were told they supplied the documents late.

Catherine McDonnell-Forney of Minneapolis said she and her three-year-old daughter were notified in early August that they lost their coverage. She said her husband, who works in Driver Vehicle Services, missed the first deadline to supply the paperwork. She said her husband sent in the materials immediately after getting another notice but the company told them the paperwork was never received.

"He sent it in by the deadline. I believe him. He wouldn't jeopardize our health insurance that way," McDonnell-Forney said. She is now buying a high-deductible health insurance plan until they can re-enroll in the state program on Jan. 1.

Eliot Seide, with AFSCME Council 5, said his union filed a class action grievance this week on behalf of 12 workers he says are eligible for coverage.

"People ought to have the opportunity to get in the appropriate paperwork so that they can see if they're eligible or not. If they're eligible, even if the paperwork came in past an arbitrary date, they are eligible under our contract and should get dependent coverage,"Seide said. "There's no fraud here. It's just people got the paperwork in late."

Seide says some state workers were delayed in responding to the audit because they had to wait for other states and countries to process marriage licenses. He said people going through a divorce may have not received the notification because the mail had not been forwarded to them. Republicans in the Legislature have praised the audit for ensuring only those eligible for insurance get it. The measure could save the state as much as $10 million.

The audit puts DFL Gov. Mark Dayton at odds with the public employee unions that backed his 2010 gubernatorial campaign. Dayton said he is looking into the problem but said four notices were sent out to state employees about the need to provide documents.

"There's a responsibility people have when you get four notices from your employer, but I'm sympathetic to anyone who doesn't have health insurance," Dayton said.

Officials with Indiana-based HMS Employer Solutions, which administered the audit, referred questions about their work to Minnesota Management and Budget.