With fraud prevention month underway, just how big of a problem is the issue for plan sponsors?
“As an industry, we estimate that benefits fraud is costing . . . hundreds of millions in terms of the impact, so certainly not a small problem,” says Karen Voin, vice-president of group benefits and anti-fraud at the Canadian Life and Health Insurance Association. “When you look at the extent of coverage that’s provided through private payers on an annual basis, it’s estimated to be around $32 billion in benefits. So even a small portion of that is a really big concern, right?”
Plan sponsors have a role to play in creating awareness among employees, including by sharing the details of their insurer’s confidential tip lines and any whistleblower programs within the organization, says Voin. “Make sure that employees know if they do suspect something, that they can report it.”
Employers can also engage workers by educating them about the plan’s value and showing them they have a role to play in keeping it sustainable, according to Voin. “And also . . . educating the employees on the consequences if they do abuse the plan,” she says, noting plan sponsors should include information about employee obligations and consequences in their code of conduct.
In addition, plan sponsors can work with their insurers to build protections into their benefits contracts, says Voin: “For example, looking at the plan structure and minimizing the opportunity for fraud and abuse through not allowing for an unlimited maximum on paramedical services . . . or employing an average maximum on some benefits to limit the opportunity for abuse.”
The consequences of benefits fraud and abuse go further than a reprimand or dismissal, says Voin, noting it also affects the plan itself and other employees. “It’s increasing the cost of the plan, and it may force an employer to look at changes to the plan or their ability to sustain the plan.”
Benefits fraud can happen any time there’s an opportunity, according to Voin. “And so it’s really just creating that awareness with employees that they have a role to play and the consequences if they abuse it. And even just understanding . . . that certain behaviours are wrong and that there will be consequences.
“I’m not sure, in all cases, employees fully understand that. I think there’s a bit of an entitlement at times. If they’ve got a benefit and they’re paying premiums into it, they may not always fully understand that doing something is wrong.”
Fraud, of course, has been in the spotlight recently, with organizations such as the Toronto Transit Commission continuing to deal with the fallout of improper benefits claims. But is benefits fraud really a widespread problem that requires urgent action or are other issues, such as rising claims volume and drug costs, more pressing given that the vast majority of employees are honest? The issue is the subject of this week’s online poll. Don’t forget to have your say.
Last week’s online poll asked whether dental services should be part of public health-care coverage. More than half (54 per cent) of respondents said there’s no reason not to include an area as important as dental health in the public system. Thirty per cent disagreed, suggesting Canada already has a good system of private coverage and a new government-based program would be expensive. The remaining 16 per cent said a program to provide coverage to workers without benefits would be the best compromise.