Cost-Saving Ideas: Monitoring Health Insurance Premiums for Retirees

In many local governments and school districts, employees have the option to receive health insurance coverage after retirement. Among other things, the retirees may be:

  • allowed a continuation of coverage for surviving spouses or certain other eligible persons for a period of time after the eligible retiree dies.
  • required to contribute to the health insurance coverage costs.
  • offered subsidized health insurance costs by allowing the retiree to buy coverage at the group rate.1

Containing health insurance costs should be a priority for local governments and school districts. One way to reduce health insurance costs is to pay premiums only for eligible retirees or their surviving spouses and dependents.

An audit of 20 school districts revealed ten school districts who collectively paid $239,000 in health insurance benefits for deceased or ineligible retirees.

Seek Competition

Review vendor and self-insured options and costs at regular intervals. If your experience rating and other factors are good, you may find comparable coverage at a lower cost. Self-insured counties may offer workers' compensation coverage to local governments located within the county.

Establish Controls

To ensure that you don’t pay unnecessary health insurance premiums for retirees:

  • design a process to verify retiree eligibility status; and
  • review health insurance bills to compare social security numbers of eligible persons with the local government or school district’s own records.

Verify Eligibility Using a Variety of Methods

Implement an eligibility verification process through formal policies and written procedures.

  • Maintain continued communication with retirees and other eligible persons
    • If retiree contributions to health insurance benefits are required, you should already have a communication process in place through insurance billing statements, withholding statements, and so on.
    • If retiree contributions are not required, consider communicating through periodic questionnaires, emails, postcards, or letters to verify that the eligible person is still alive. You can also update any relevant personal information (marriage, divorce, changes in dependents, address or phone number change).
  • Social Security Association Death Master File: Periodically compare your records of eligible retirees to the Death Master File (DMF) from the Social Security Administration (SSA). The DMF lists over 65 million death records that have been reported to SSA. It’s available through the National Technical Information Service and may have an associated cost.
  • Genealogical websites: Compare local records to death records reported to SSA using genealogical websites. Search these free websites by social security number or name. You can only search for one individual at a time. This may be a good option for smaller local governments or school districts, but may be too time-consuming for larger units.
  • More labor-intensive options: Other useful sources include reading the local obituaries each day, family notification, uncashed Medicare reimbursement checks and notification by the New York State and Local Employees Retirement System. It's important that a central resource review and verify this information against a master eligibility list.

Review Health Insurance Bills

Ensure that health insurance bills only include retirees, surviving spouses and other eligible persons. Simply crosscheck the social security numbers listed on the bill to those already identified as eligible. Remove any ineligible individuals from the health insurance coverage.

Seek Reimbursement for Premiums Paid for Deceased Retirees

Local officials should immediately contact their health insurance provider to stop coverage for deceased individuals and seek reimbursement for any premiums previously paid since their death.


US Department of Commerce:

1 In some cases, coverage may be subject to the provisions of a collective bargaining agreement. Also, for those local governments and school districts that participate in the NYS Health Insurance Program (NYSHIP), coverage may be governed by Rules and Regulations of the New York State Department of Civil Service (4 NYCRR Part 73).

Updated 2017