HEALTH INSURANCE AUDIT RECOVERS
MORE THAN $50,000 IN COUNTY OVERPAYMENTS

Following an audit of its own Health Insurance unit, the Nassau County Comptroller’s Office has recovered, to date, more than $50,000 that the county overpaid for the health insurance costs of its current and retired employees. The office has applied for and is currently awaiting refunds or credits for another $80,000.

The overpayments were due mainly to a failure to end coverage for individuals who had either stopped working for the county, passed away, or, in one case uncovered by auditors, never existed. "We believe this kind of self-examination by the Comptroller’s Office is a first for Nassau County," Comptroller Howard S. Weitzman said. "This audit is a part of our determined effort, along with the Suozzi Administration, to repair and reinvent Nassau County government".

"Since becoming Comptroller in 2002, I have directed my staff to systematically review all of our operations. We have re-examined our information infrastructure and are in the process of updating and rationalizing our record-keeping procedures and computer systems. The result, as in this case, is likely to be real dollar savings for the county’s taxpayers."

The audit found overpayments for county health insurance costs of approximately $338,000, some of them dating back over the last decade. Of this amount, $238,000 was overpaid because coverage was not stopped for individuals no longer entitled to it. Approximately $90,000 was a result of delays by the county in resolving grievances by terminated employees, during which time they continued to receive benefits. Auditors also found that the county had paid $10,000 in premium costs apparently due to an insurer’s mistake in assigning to the health plan an individual with no connection to the county.

Health insurance benefits for county employees, retirees and their dependents cost approximately $150 million per year. In addition, the cost of dental insurance and optical coverage is $5.4 million and $1.5 million, respectively. In all, the expenditures amount to six percent of the county’s budget and 15 percent of its personal services budget.

The audit found that the health insurance unit had no computerized process for matching enrollment files from insurance carriers to the county database to ensure that all enrollees are entitled to coverage. In one case uncovered by the audit, $1,250 in premiums were paid over the last 10 years to insure a fictitious individual, listed as "John Q. Public". The name had been entered as part of a test file when the enrollment file was first established, and the record was never purged from the database.

"The Comptroller's Office is in the process of upgrading its technology in order to facilitate this kind of data matching," Mr. Weitzman said. "Once this is accomplished, we will be able to detect errors quickly and correct them before incurring unnecessary expenses."

Nassau County provides health and optical insurance coverage for its employees and retirees, and dental insurance coverage for its employees. The county participates in the New York State Health Insurance Program ("NYSHIP"), which offers health and prescription drug insurance to state and local employees through the "Empire Plan".

The Comptroller’s Office health insurance unit is responsible for initiating and terminating coverage for some 24,000 primary enrollees and their 47,000 dependents. Additionally, the unit collects and records about $5 million in premiums paid by employees, retirees’ survivors, terminated and vested individuals who wish to retain their coverage or who have opted for coverage that is more expensive than the basic plan.

The full text of the audit report is available here:

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Nassau County Comptroller’s Office Operational Review of the Health Insurance Unit
( ~ 290 kB - 23 pages )

Corrective Action Plan ( ~ 22 kB - 5 page "pdf" file)