Health scams on the rise

WEDNESDAY, AUGUST 24: An increasing number of rogue employers are deducting health insurance contributions from staff and failing to make the payments.

“It’s a criminal offence, it’s theft,” warns Ed Ball, general secretary of the Bermuda Public Service Union.

He said the union had given an ultimatum to employers — ‘sort it out or we’ll take you to court’.

“It is more widespread than people think. We’ve reported it to the companies involved to give them time to deal with it but we are prepared to go to court.

“We have sufficient evidence.”

The Bermuda Industrial Union and private employment consultants have also reported similar cases.

The majority are said to involve struggling businesses with cash-flow problems that have unintentionally fallen behind on group insurance bills.

But some are more cynical.

In one case, involving a Filipino carer for seniors, an employer has been accused of terminating her insurance policy and continuing to make deductions for six months.

Cash flow

The employee only found out when she went to the doctor and was told she had no coverage.

Thad Hollis, who runs consultancy firm Employment Matters, has taken up her case with the Department of Labour and Training in a bid to get the money back for the woman, who has since left the island.

“That is an extreme case. In most instances this is connected to cash flow problems,” he said.

“Small businesses are hurting.

“They may have enough to make sure everyone gets paid but they are short on cash and they fall behind on things like insurance payments.

“Usually it is not out of maliciousness, they are trying to keep their businesses afloat.”

He said even firms that were doing well and had a lot of work could experience problems if their clients were not paying on time.

“They may have plenty of work but if bills aren’t getting paid on time then they don’t have the funds available to pay the insurance or payroll tax contributions and it spirals through the system.”

Mr Hollis, an employment consultant, said he was seeing increasing numbers of cases.

He said questions over social insurance and health insurance payments were now part of the package in dealing with employment disputes.

Mr Ball has highlighted the issue as an increasing concern for the BPSU membership. He said it was not always immediately obvious because some insurance firms offered some leeway, when it came to unpaid bills.

“We’re seeing it more often,” said Mr Ball.

“Health insurance and  social insurance contributions are being deducted and not forwarded to the respective agencies.”

Monitored

The Bermuda Sun reported in July that 14 businesses were under investigation for failing to pay health insurance.

The Bermuda Executive Health Council, which monitors compliance with insurance regulations, referred the companies to Government, following its twice-yearly check in December.