How Employers Can Protect Group Benefits Plans from Fraud and Abuse
In our first Blog in April – Group Benefits Plans, Abuse and Fraud – we discussed what Benefits Plan Abuse and Fraud are with respect to Employees and how they are committed. In our second blog in the series, our discussion will focus on employers, to assist them in recognizing how group benefits plans should be a resource that is fiercely protected, but criminal activity, like fraud and abuse, can impact a benefits plan for all employees. Benefit fraud and abuse are more of a common occurrence than most Canadians may believe, and this fraud and abuse will ultimately result in higher premiums costs and a significant reduction in coverage and can lessen the general sustainability of a plan. Because some of the consequences of benefit fraud and abuse can affect the sustainability of employee plan, employers must reduce the risk of benefits fraud and protect themselves and their employees by taking preventative measures.
Let’s discuss what employers can do to protect group benefits plans from fraud and abuses and what proactive measures are easily accessible to every Canadian employer.
What Constitutes Employee Benefit Fraud and Abuse?
Benefits plans can be exploited through different methods, and some individuals opt to push their plans’ limits for personal gain without considering the extensive consequences. These benefits can be exploited in many ways, such as an employee under a plan submitting false information for personal financial gain or using the plan’s benefits to an excessive amount when it is not needed. These instances of abuse and fraud can be circumvented if an employer takes specific measures to deter employees from pursuing these workplace criminal activities.
One of the best ways an employer can deter benefits fraud and abuse is to educate the employees that use the benefits plan. The intricacies of the benefits plans and the claims employees make are directly linked to the cost and sustainability of the plan, and understanding how abusing these claims can negatively impact the future of a benefits plan can be an educational tool that will deter the occurrence of fraudulent claims. Employers can also take time to train employees on ways to identify suspicious and fraudulent activities, including submitting false claims or misrepresenting certain medical conditions. Such training will help employees determine potential risks and give them the awareness they need to effectively report any nefarious activities they may notice within their place of business.
Work with Your Benefits Provider
A benefits provider can be a valuable resource in helping an employer of a business prevent and detect fraud and abuse. A benefits provider can give an employer the proper resources and tools to help identify potential risks and implement appropriate controls to mitigate them. Additionally, the job of the benefits provider is to review claims data to identify any potential issues and offer guidance on how to address them.
Establish Strong Controls and Monitoring Systems
To detect and prevent fraud and abuse, employers should establish strong controls and monitoring systems. This includes implementing policies and procedures to ensure that claims are legitimate and accurate. For example, employees should be advised that they could be required to submit documentation to the benefits provider to support their claims, such as receipts and invoices. Employers might also establish more robust control by ensuring that passwords associated with the benefits plan are strictly confidential and regularly changing for an extra layer of protection while also using multi-factor authentication for any personal accounts. Additionally, employers should regularly review employee claims to ensure that there are no explicit discrepancies. Additionally, employers should regularly review the claims utilization of their Employee Group Benefit Plan with their benefits provider to determine if there are any explicit discrepancies in the types and amounts of claims being submitted.
Consequences for Fraudulent Activities
Employers must make sure their employees are aware of the consequences of benefits fraud and abuse and make it known these consequences will be enforced if required. The consequences of benefits fraud and abuse are essential information that sends a message to employees that fraudulent behaviour will not be tolerated and can result in job loss and criminal prosecution. Understanding the potential consequences of their actions could help deter employees from engaging in fraudulent activities.
Protecting your group benefits plans from fraud and abuse is essential for every Canadian employer to ensure their employees receive the benefits they are entitled to and prevent financial losses to their organization. Establishing strong controls and monitoring systems, educating your employees, working with your benefits provider, and making the consequences of such fraudulent actions known are all effective ways to prevent and detect fraud and abuse. By implementing these tips, an employer can effectively protect a benefits plan and gain better control of their place of business.
CTA: At Health Risk Services, we help managers of benefits plans make strategic decisions to craft cost-effective personalized plans that can assist you and your organization to address benefit fraud and abuse. Whether the solution of preference for your company is adding additional support programs, renovating your existing coverage, or crafting intentional messaging, Health Risk is here to help!
To schedule your Complimentary Consultation with Health Risk Services, please call 403-236-9430 OR email: [email protected]