As an employer, you invest your hard earned money into an employee benefit plan to help attract, retain and maintain the health of employees. It is unfortunate when concerns arise around abuse due to employees making unnecessary claims that drive up premiums at renewal time. So it’s in your best interest to be proactive rather than reactive.
What Is Employee Benefit Plan Abuse?
A classic issue is when employees don’t go to a massage therapist but go to a health spa that has massage therapists on staff. Small distinction, significant price difference.
Now if you have an employee that chooses to go to the health spa multiple times on the weekend, that can be considered abuse by the insurance company.
Reasonable & Customary
Most of the insurance companies either have a dollar limit per visit or they will have what is they call a “reasonable and customary” charge. This means if your employees are going to a practitioner that charges above the standard rates, the reimbursement amount will be reduced to a more reasonable amount.
If you go for a two-hour massage, they’re going to want to see a doctor’s note to make sure it’s medically necessary. Many insurance companies already want to see a doctor referral for massage therapy because it’s prone to abuse.
The Value of Education
When purchasing an employee benefit plan, you should be dealing with a knowledgeable broker that properly educates you and your employees on details you need to be aware of – especially little when all parties are conscious of their own personal usage habits.
Any employer with fewer than 50 employees should be considering the potential benefits of a pooled plan. 95% of Canadian employers who pay for an employee benefit plan are getting what’s called experience pricing, a model that leaves you subject to being penalized for every claim made through out the year.
Pooled plans aren’t offered by many brokers but can be a valuable asset for any employer that is considering or already paying for an employee benefit plan. Your employee benefit plan would be pooled with a larger group of companies that assist each other through high claim years by leveraging their purchase power with the insurance companies.