Benefits Fraud: A Collective Issue

Group benefits plans provide undeniable advantages. They promote employee health, well-being, financial security, and peace of mind while helping organizations attract and retain talent. However, the value they offer is constantly threatened by benefits fraud and abuse.

What Are Benefits Fraud and Benefits Abuse?

Group insurance benefits fraud refers to any intentional act aimed at deceiving an insurance plan in order to obtain a financial benefit to which an individual is not entitled. It can take various forms, including the concealment, falsification, or misrepresentation of information. This illegal and criminal practice may be committed by a plan member, a service provider, or both parties acting in collusion.

Benefits abuse involves obtaining treatments, services, or products beyond what is considered reasonable or medically necessary.

Real-Life Examples

Fraudulent activities may take many forms, including:

• Falsifying documents or receipts
• Billing for a treatment before it has been completed
• Claiming expenses that are not eligible under a specific benefit
• Altering the date on which a service was received
• Submitting a reimbursement claim for care that was never provided

Significant Consequences for Everyone

Beyond the financial losses incurred by employers, which amount to millions of dollars each year, fraud undermines the integrity and sustainability of group insurance plans. It contributes to higher premiums for all plan members and may result in reduced coverage or even the complete elimination of certain benefits.

Individuals found guilty of fraud may face disciplinary action up to and including termination of employment, fines, a criminal record, and, in some cases, imprisonment.

Working Together to Prevent Fraud

Preventing fraud is a shared responsibility. Plan members, employers, and insurers all have a role to play in protecting the integrity of group insurance plans.

What Can Plan Members Do?

• Create strong passwords, keep them confidential, and update them regularly.
• Use multi-factor authentication to strengthen account security.
• Verify the accuracy of benefit claims by reviewing claim histories, details, and receipts.
• Report any suspicious activity or potentially fraudulent providers to their employer or insurer.
• Understand which expenses are covered and not covered under the plan.
• Seek services from healthcare professionals who do not offer inappropriate incentives.

What Can Employers Do?

• Raise employee awareness of the risks and consequences of fraud.
• Provide information on best practices to help protect the plan.
• Encourage cost-sharing mechanisms such as deductibles and co-payments.
• Offer a Health Spending Account (HSA) where appropriate.
• Promote the responsible use of healthcare services and prescription drugs.

What Can Insurers Do?

• Implement robust fraud detection systems and technologies.
• Maintain specialized teams dedicated to data analytics and fraud investigations.
• Use artificial intelligence to strengthen existing detection mechanisms.
• Collaborate with the Canadian Life and Health Insurance Association (CLHIA) and other insurers.
• Leverage past cases to improve fraud detection tools.
• Develop and share awareness materials for organizations and their employees.
• Remove providers suspected of fraudulent practices from eligible provider lists to limit losses and protect insured members.

The CLHIA offers a variety of resources related to fraud and abuse, available on the organization’s website.

To learn more or obtain support with benefits fraud awareness initiatives, contact our team.

Video credit : Canadian Life and Health Insurance Association