Indianapolis – The state is cracking down on employees that might be misusing health care insurance.

In this exclusive 13 Investigates report, Sandra Chapman shows us the extreme measures state employees and even lawmakers must undergo to get coverage for their spouses and children.

Prove it. That’s what Indiana is telling state lawmakers and 34,000 state workers, applying for insurance coverage for their spouses, children and other dependents.

By the end of July, employees must present birth certificates, marriage licenses and tax returns to show their loved ones are legally eligible for benefits.

“This is the first time we’ve done this in years,” said Pegg Warnick, Communications Director with the Indiana Department of Personnel.

It’s all part of a state audit by AON to save taxpayer dollars and weed out fraud.

In 2008, the State Inspector General found two Department of Corrections employees illegally getting coverage for live-in companions.

“We want to be better stewards of taxpayer money. We want to make sure we’re paying for what we should be paying for. Not adding to taxpayer’s debt,” explained Warnick.

Mike Garrett’s wife jumped through the hoops, only to lose her job in a new round of financial cutbacks.

“It was hard getting a marriage license. We been married for 43 years. You have to go back and get the original marriage license,” Garrett told 13 Investigates.

“It is a nuisance,” agreed Warnick. “It really is to go and have to find your marriage certificate, but still it’s part of it. We just have to do it,” she added.

Turns out the Garrett’s didn’t need to submit the records anyway. Under the policy, the documentation is only required for health coverage, not eye and dental care.

The Department of Personnel says other states have saved anywhere from two to eight percent. Indiana expects to recoup six percent.

“In dollars that’s about $6.4 million,” Warnick calculated.

Warnick says State Personnel isn’t interested in specific tax dollar amounts on tax returns. Employees can simply blacken out that information.

As for security, within days of the receipt and verification of the documents, the contractor has been ordered to destroy the records.

Overall, Mike Garrett thinks the audit is a good idea.

“Sure they should. Why shouldn’t they?” questioned Mike Garrett, thinking about the potential savings of taxpayer dollars.

“The bottom line is if they’re ineligible, to be on our health insurance they will be kicked off the insurance. They will lose coverage from our insurance carrier,” assured Warnick.

The state is paying AON $300,000 for the audit.

Notices have been sent out to all employees. Anyone who hasn’t received the letter should contact State Personnel at 232-0200.

State employees charged with knowingly defrauding the state could face criminal charges, in addition to losing their jobs. The state says it will take each case on its own merits because some employees unintentionally forgot to update their files about family changes.