Group benefits are widely enjoyed by many employees because they get discounted goods and services that otherwise they may not be able to afford. But, when are the employees crossing the line? We outlined a few scenarios that describe when an employee is committing employee benefits insurance fraud by misusing their group benefits.
Would you recognize insurance fraud if you saw it?
Too often, when people think of Insurance Fraud, they think of high-stakes phone calls, secret lunch meetings and offshore bank accounts. The truth is that everyday examples of fraud are surprisingly common. Would you recognize insurance fraud if you saw it?
Scenario 1: Getting a Massage
You are enjoying a relaxation massage at your local spa. Your esthetician says you should come back soon. You would like that but can’t afford it too often. She asks if you have benefits at work. Since you do, she offers to write on the receipts that the RMT did the massage so you can have it fully covered or mostly covered by your employer’s insurance. Is this fraud?
Answer: Everyone loves a good relaxation massage when life is stressing us out. RMT’s normally get involved to assist people with rehabilitation from injuries, like a car accident or chronic back pain. Many times, insurers ask for a Doctor’s referral for the RMT to treat a specific issue. If you are audited, the absence of the RMT recommendation from a medical professional can disqualify your massage from the covered benefits. Similarly, some people have been caught describing off-the-shelf orthotics as “custom orthotics” to seek a reimbursement. Any receipts submitted for services not rendered are fraud, even if the expenses would have otherwise been eligible if they were provided legitimately. You will have to repay the insurance company for any reimbursements received and may face a criminal charge.
Scenario 2: Seeing a Chiropractor
You are seeing a chiropractor for an old sports injury. When you reach your yearly maximum, your chiropractor suggests billing future treatments under your spouse’s name. He says the insurance company was willing to spend the yearly maximum on each of you, so nothing has changed. Your spouse doesn’t mind, as they don’t need chiropractic care.
Answer: This is employee benefits fraud because the coverage is per person, and you have already used your share.
Scenario 3: Going to the Dentist
You have a dental plan that has 80% coverage. Your dentist says that if you provide some referrals to her dental practice, she will waive your 20% co-pay on an upcoming dental treatment. Is this okay?
Answer: According to the Ontario Dental Association, it is against the law for you or your dentist to conspire to avoid paying the co-payment. It is also contrary to the regulations of the Royal College of Dental Surgeons of Ontario (RCDSO) that regulates the dental profession. This practice is considered professional misconduct and a dentist can lose their license for it, as well as incurring hefty fines, often exceeding $10,000.
If your dentist wants to offer a discounted rate for any reason, it is okay to do so, so long as you still pay your co-payment on the reduced amount that you have been charged.
For example, if a $100 service was paid as normal, you would be responsible for paying $20.
If your Dentist gave you a 30% discount because you brought her several referrals, she would be charging $70 for that service, and you would be responsible for paying $14.
Most people are honest and use the benefits they are entitled to, when and if they need them. When other people commit employee benefits fraud, it’s not stealing from the insurance company; it is stealing from the employer and employees. In most cases, the price for your employee benefits is partially paid by you via payroll deduction, and partially by your employer. Honest reporting of benefits usage helps keep group benefits affordable. Your employer can continue to offer them, and any co-pay or payroll deduction that comes out of your pocket can be as low as possible.