Last month was Fraud Prevention Month, an awareness campaign aimed at helping individuals to recognize, reject, and report fraud. Although the term “insurance fraud” conjures up images of grand schemes to pull off six or seven figure claims, employee benefit fraud is part of the picture as well. Evidence of this can be seen in the very recent Toronto Transit Commission benefits fraud scandal, with over 200 employees either being let go, resigning, or retiring in its wake, and a $7million reduction in submitted claims since the investigation began in 2014 (CBC News).
Fraudulent claims increase the costs of coverage, so it’s in everyone's best interest to recognize, reject, and report it. Keep reading for two sure-fire ways to help keep the cost of your plan down by preventing benefits fraud.
Educate Your Employees
1. The Costs
It’s hard to judge the cost of something when it’s paid by someone else. Employees may not understand the impact that their claims have on their group plan By explaining to your employees that excessive claims increase the cost of the plan (and increased costs may force an employer to scale back the benefits plan), employees will be less inclined to abuse or defraud the plan.
2. How to Spot Fraud
If a trusted service provider suggests a fraudulent practice to a patient, the patient may not even realize that what they are suggesting is considered fraud. By educating your employees on how to spot benefits fraud, they are less likely to be duped by unscrupulous practices. For help with this, contact your broker or insurance carrier! It’s in their best interest to help you deter fraud, and it is more than likely that they already have literature and messaging you can pass on to educate your employees.
Have a Strategic Plan Design
This is the most effective way to prevent fraud, and one of the reasons why having a knowledgeable benefits consultant is so important. Fraud prevention methods often go hand in hand with cost-containment measures, but can also include grander plan design changes such as the addition of a Health and/or Wellness Spending Account or splitting your plan into tiers based on employee tenure or seniority. While insurance can be a complex landscape to navigate, benefits consultants are experts and are there to help you keep you group benefits plan healthy.
Although Fraud Prevention Month is in March, we all need to do our part to prevent fraud all year round. So do your part to protect your benefit plan, and your wallet.