Reports of sophisticated schemes to swindle huge sums of money through false benefits claims have been in the headlines lately. These news stories illustrate how group health benefits scams can affect everyone who has a benefits plan, says Shelley Frohlich, Director of Fraud Risk Management at Sun Life Financial.

“Often employees believe that it’s the insurance company’s money funding their plan. They don’t realize that it’s their employer’s money or their own,” says Frohlich.

While most people don't participate in elaborate fraud schemes, some plan members don’t think twice about claiming a pair of non-medical designer glasses, because they believe that falsifying claims is a ”victimless crime” or that they won’t get caught. But there IS a victim – false claims drive up premiums for plan sponsors and could put your benefits or even your employment at risk.

Fraud prevention tips

To avoid being duped or enabling fraud, it’s important to be vigilant, and never share your passwords with anyone. Sharing your login information for your benefits carrier could put your money at risk. Frohlich says in one case, the owner of a healthcare facility lured clients into sharing their logins under the guise of helping them check their coverage to ensure claims would go through.

Then, once the owner had his clients’ passwords, he would change the clients’ direct deposit information to his own and make false claims to receive cash from his clients’ benefits providers.

To protect yourself, avoid doing business with anyone who asks for your passwords. Also, scammers are particularly interested in targeting consumers who have rich benefit plans says Frohlich, so be wary of retailers or service providers who ask questions like: “What else does your plan cover?”

Watch out for these other red flags:

  • Retailers who try to entice you with incentives to buy more than what your physician has recommended. Watch out especially for promotions that are way above the norm, such as a free pair of shoes with the purchase of orthotics.
  • Avoid stores that have more non-medical items than medical items on display. A safer bet is to buy medical items from experts who work in that field – i.e., purchase eyewear from your optometrist and orthotics from your foot doctor.

Reporting fraud: Use your benefits fraud hotline

Beyond being scrupulous about the medical service providers you use, be on the lookout for fraud in your organization. Often people will ignore fraud because they don’t want to be labelled a whistleblower or to tell on their co-workers – but not speaking up could hurt your coverage. “Again, it comes back to your benefit plan. If fraud is happening on the plan then the plan may get too expensive for the employer, and they may have to cut back on benefits,” says Frohlich.

If you are aware of fraud, many providers such as Sun Life offer a secure benefits fraud hotline for confidential tips. Sun Life’s hotline: 1 888 882-2221.

The bottom line

Criminals are constantly developing new benefits fraud schemes, so in response, healthcare benefits providers like Sun Life Financial are stepping up their efforts to curb fraud by using the latest forensics technology in fraud analytics. If you have a concern about your health benefits, reach out to your employer or provider. Speaking up could protect your healthcare coverage.