According to the complaint, the accused councilman defrauded the city of roughly $33,000 in medical premiums when he listed his "wife" on city forms from 2013 to 2017. Prosecutors allege he used public funds to pay for her healthcare even though he was still legally married to his actual wife. He ultimately divorced his wife and married the claimed dependent in 2018, but the damage already occurred by then.
How could the city have covered this non-spouse for five years?
While this is appalling and frustrating news, we often see ridiculous coverage at DSI. This oversight is relatively straightforward for verification professionals like us to track down and resolve. A simple document request from the councilman would have uncovered that his claimed "spouse" was not his legal one. And if there were an attempt to verify her eligibility as a Domestic Partner, an affidavit stating that neither party (councilman or "spouse") was married to another person would also uncover her ineligibility for benefits.
Experienced HR professionals and benefits consultants know that employers and plan sponsors (like the City of Los Angeles) are at severe financial risk without proper monitoring of dependent eligibility.
That's why 86% of large employers verify dependent eligibility annually or in an ongoing capacity in real-time as dependents are added to the plan (per the National Business Group on Health annual survey 2018). Over 55% of mid-sized employers check dependent eligibility at least annually (per DSI proprietary RFP and book of business analysis 2021-2023).
It's not often that Dependent Audits make scandalous national news, but we can't help but bring it to your attention when it happens. (Full story from the LA Times here.)
With over a decade of experience and over one million dependents verified, we have the best practices and expertise to protect employers (or cities like Los Angeles) from ineligible dependents and claims.
Contact our Verification Specialists for more information on how we can save you or your clients from fraudulent claims.
