10.26.2017

Battling Benefits Fraud: How Advisors Can Help

Robert Crowder, founder and President of The Benefits Trust, has over 30 years of experience serving pension and employee benefits clients. In 1994, he founded The Benefits Trust as a Third Party Administrator serving small and mid-sized business across Canada. Through Rob Crowder's dedication and leadership, The Benefits Trust has grown into the successful benefits provider that it is today.

Battling Benefits Fraud: How Advisors Can Help

People often view insurance fraud as a victimless crime, affecting big companies rather than small businesses and employees. They couldn’t be more wrong! Fraud raises premiums for both employers and employees—everyone pays the price. According to the Canadian Health Care Anti-Fraud Association, benefits fraud costs the industry between $1.2 and $6 billion every year.

Benefits fraud can range from an employee submitting a claim for services they did not receive, to increasing the dollar amount of the services, to more complex issues involving both individuals and service providers.

In a recent Small Biz Advisor article, our own Mike Ignatz, Head of Business Development and Fraud Investigation at The Benefits Trust, explains some of the ways advisors can reduce benefits fraud.

First, it’s crucial for advisors to stay vigilant—this means conducting a thorough review of all claims to identify any discrepancies. Advisors can also rely on HR’s insights when it comes to individual claims and understanding what’s going on in the company.

Next, advisors can encourage employers to think about the purpose of their benefits plan and how it will be used by employees. This will ensure that the client ends up with a plan that best suits their needs and won’t be misused.

Another strategy involves educating employees about benefits fraud and why they should care: “When you commit fraud, you are really reaching into the pocket of the person next to you. They end up paying higher premiums ― or losing benefits ― because the employer can no longer support the claiming patterns,” Mike says in the article.

Mike also encourages plan members to be wary of medical service providers taking advantage of their coverage: “Many clinics make submissions on their behalf, and this can lead to overbilling.” For example, a service provider may bill for a more complex, time-consuming, or costly procedure than they actually performed to maximize insurance payouts. Employers can educate employees about always checking what their insurance is being billed for to ensure their benefits don’t get maxed out prematurely.

Finally, advisors can reduce fraud by designing a benefits plan that makes sense for all parties. This might include the use of co-pays, deductibles, or healthcare spending accounts.

Combating benefits fraud is no easy task, which is why advisors need to be prepared and armed with strategies to protect employers and employees alike.

To learn more about how advisors can prevent benefits fraud, be sure to read the full Small Biz Advisor article.


Get in touch with us today to discuss how a well-designed benefits plan can reduce the potential for benefits fraud.

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