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Teach employees about types of benefits fraud

Posted by on Feb 26, 2013 in Legal, Smallbizadvisor | 0 comments

BY Sheryl Smolkin, lawyer and journalist | February 19, 2013

Isolated incidents of wrongful conduct by employees may not be sufficient grounds for dismissal, but as in the case of a recent Ontario legal decision, if an employee commits benefit fraud and then lies about it, employers have no choice.

Read the case here: Employee lies about daughter, cashes her benefits payments

In the case, where the employee cashed the benefits reimbursements for false claims, the actual amount of the claims were only a few hundred dollars. But the court found that her actions were “just cause” for termination without notice or compensation in spite of her 19 years of service at her employer, Costco.

Had the employee been honest when contacted by Manulife after the first two false claims, she may not have been fired or she may have been able to successfully claim that she was wrongfully dismissed. Ottawa employment lawyer Sean Bawden with Kelly Santini LLP says if she had been wrongfully dismissed, a court would have likely awarded her at least one year’s pay.

The Canadian Health Care Anti-Fraud Association (CHCAA) reports that between two percent and 10% of every health care dollar spent annually on health care in Canada is lost to fraud. This means that the cost of health care fraud could surpass $12 billion each year.

And every dollar paid out as a result of a fraudulent claim is one more dollar that is not available to for the legitimate health care needs of a plan sponsor’s workforce.

In order to keep benefit plans affordable, advisors and plan sponsors should support industry and insurance company programs designed to minimize fraudulent health claims. Advisors should also educate employees regularly about the many forms benefit fraud can take from lying about claims to more minor infractions.

Read: Do you know what benefits fraud looks like?

Each case of dishonesty that’s uncovered should be thoroughly investigated and documented. In addition, employee communications should clearly state that employees who commit health care fraud will be fired and criminal charges may be laid.

Because the courts will consider the specific facts and context of the course of events leading up to each termination to determine whether or not it is justified, employers should always consult their legal counsel prior to terminating an employee for cause.

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