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March is fraud prevention month; this newsletter shares sector-wide news and tips to avoid benefits fraud. 

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March is Fraud Prevention Month

Benefits fraud and abuse have a major impact on your group benefits plan. These actions can result in higher premium costs and reduced coverage.  It also affects the sustainability of your plan. It’s important to be aware of group benefits fraud, what it looks like, and how it can be avoided. Here are some helpful tips on how to protect yourself from benefits fraud.

Case Study: CAAT Group Insurance Plans and False Claims

The College Employer Council (CEC) is the policyholder for the CAAT Group Insurance benefits plan for the 24 Ontario Colleges. One of CEC’s roles is to keep the group insurance plans sustainable and prudently funded. The threat to the plan sustainability posed by benefit’s fraud continues to be a concern for CEC.

WHAT IS BENEFITS FRAUD?

Health and dental benefits fraud occurs when an insured member of the benefit plan, service providers, clinics/facilities, and/or third parties intentionally submit false or misleading information to the insurance provider for financial gain, i.e. to gain an unjust advantage of benefits such as over reimbursement.

When a person intentionally commits benefit fraud, they may think it’s harmless and does not affect their employer. In the case of the Colleges, this is false, the reality is they are stealing from their employer NOT from the Insurance company. In the case of a retiree, a false claim affects other members of the plan because it is the members who 100 per cent fund the plan through their premium payments. 

Example of a benefit fraud scenario: 

• An employee submits claims electronically via Sun Life’s member services website, many of the claims are legitimate, but the employee also submits false claims.
• Sun Life’s data mining and analytical tools as well as audit controls identify unusual claiming patterns.
• The employee, when questioned, is unable to produce receipts for all the services claimed.
• When contacted by Sun Life, the provider of service is quick to confirm that some of the services were not incurred as claimed.
• Following a detailed investigation, Sun Life notifies CEC as the policyholder, who then works with the College to facilitate investigation/conversation with the employee.

CONSEQUENCES OF BENEFITS FRAUD

Benefits fraud is a crime and the consequences are real. Depending on the severity of the crime, there are a few outcomes.

Lose Benefits

The insurance provider and CEC could increase premiums, or reduce coverage for the individual employee. Additionally, the employee would have to pay the money back and could lose benefits completely. In some cases, reimbursement of legitimate claims could be suspended until the value of the fraudulent claims is recovered.

Criminal Charges

Benefits fraud is a serious crime and depending on the severity of the case, criminal charges could be laid and lead to a conviction and permanent criminal record.  Even if one avoids jail, having a criminal record could make it very difficult to find a new job or potentially travel across borders.

Lose Job

Stealing from your employer is a serious offence, and many employers have a zero-tolerance policy for benefits fraud. If you are caught intentionally falsifying benefit claim information, this is grounds for termination at the Colleges. Being fired for benefits fraud could potentially make it harder for an individual to find employment elsewhere as their name will be flagged in the insurance database.

WHAT CAN YOU DO?

Benefits fraud affects everyone. Help fight benefits fraud by using your benefits appropriately and reporting fraud when you see it. 

If you are suspicious of an activity or request regarding your benefits plan coverage – please call Sun Life’s Fraud Tip Line, toll-free at 1-888-882-2221, or email Sun Life at clues@sunlife.com.  Your confidentiality will be protected.