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Workplace benefits fraud on the rise, experts say

It’s a bigger problem than you think. Here’s why these scams matter.

Serious asian businesswoman executive scolding employee holding document report dissatisfied with work resultsThe repercussions of workplace benefits fraud can include the loss of benefits, termination of employment, criminal charges, fines or jail time. (Shutterstock)

Workplace benefits fraud is on the rise in Canada, costing insurance companies hundreds of millions of dollar each year, according to Canadian Life and Health Insurance Association (CLHIA), which launched a national fraud awareness campaign, last year.

But most Canadians feel workplace benefits fraud is no big deal, according to an Environics Research survey conducted for the CLHIA, with 75 per cent of respondents believing the punishment is simply paying higher premiums or reimbursing claim payments.

In fact, repercussions can include the loss of benefits, termination of employment, criminal charges, fines or jail time. Service providers risk being delisted from major insurers, sabotaging their reputation and losing their license to practice. Plan sponsors, or employers, will find plans have increased fees and premiums. 


In 2018 alone, Sun Life “delisted” 1,500 providers from across the country—no longer accepting their claims—after proving their involvement in false claims. These could include health and/or dental benefits claims for services and/or procedures never performed, or service providers misrepresenting dates of service, locations and service details on receipts. [See The 3 most common types of workplace benefits fraud

To protect themselves, insurance carriers invest heavily into fraud management solutions. Sun Life, for example, uses data-analytics and machine-learning technology to suss out suspicious behaviour, intelligence analysis to identify players in complex schemes, and investigative skills to monitor a facility and member-claim activity. 

“The digital era has allowed us to identify and stop fraud faster than ever before,” says Gary Askin, assistant vice-president, fraud and risk management at Sun Life. “Although the fraudsters may think that it’s easier to submit fraudulent claims now, from our perspective, it’s easier to pick up on them as well.” 

Like any type of fraud, prevention is key and everyone—carriers, sponsors, members, service providers, government and law enforcement—can play a part in the crackdown, says Askin.

“It’s not all about enforcement,” he says. “It’s about education and awareness as well, and our best weapon to stop this, the best thing we can do, is to have an informed public.”


Plan members can protect themselves from becoming a target, according to Sun Life. This includes: keeping benefits information private to prevent fraudulent claims being submitted under your name; submitting claims online with direct deposit for faster processing; keeping up on emails from carriers to monitor claim activity; checking receipts to ensure information—including provider details, service and fees—is accurate; avoiding signing claim forms in advance (or blank forms); and seeing what will be submitted on your behalf. 

For service providers, fill in receipts accurately, look out for suspicious activity on work premises, and protect your personal information, including your licensing numbers, particularly if you leave a place of employment. 

As an employer, or plan sponsor, it’s your responsibility to ensure staff understands how to use their benefits plans responsibly, the repercussions of not doing so, and how benefits plans can be impacted by fraud activity. Conducting regular claim audits and assessments, and perhaps adjusting plan details, are also best practices.

“Signing up for your benefits is more than sitting down across from HR, filling out a form, getting your benefit book, and being told, ‘Have a good day’,” says Shannon DeLenardo, director, anti-fraud and electronic claims at CLHIA. “We need to start educating the plan sponsors, so they can start repeating the same messaging.” 

Whether you’re a member, sponsor or service provider, if you suspect suspicious activity, you can report this, anonymously, to either your employer, insurance carrier or industry regulator.


Are you a non-profit organization interested in learning how to better manage fraud at work? Check out CPA Canada’s online course Internal controls and fraud prevention for small and medium not-for-profit organizations for best practices in audit and assurance.