Health Care Benefits Gift?
A friend of mine has opened a company that allows a person to use their health care benefits for things like Orthotics and Compression Stockings but they also give you a free "gift" (something like a pair of shoes or a purse) that they tell you not to mention to your insurance company. I feel like this is in some way very sketchy but I'm not sure as to if this is something that could get me in trouble.
Does anyone have any idea on the legality of this? I'm located in Canada.
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Generally these work like this:
you have private insurance that covers your actual expenditures on specific non-prescription but sort of medical things, like massages, orthotics, crutches, or whatever. This insurance doesn't insist that you shop for the best price, or reimburse you only the fair price for the item. You send a receipt; they send you a cheque.
the item should cost 0.
they charge you 5 for the item and "throw in" something you think is worth , but that cost them or . You think you're getting free stuff for nothing
the insurance company is paying too much and will either raise premiums, lose money, or institute a complicated "market value check" for all reimbursements eventually.
Any profit the orthotic-wearer or massage-getter receives comes out of their fellow insureds, most likely in the form of way more hassle in a few years getting claims processed. And the value of the shoes, purse, necklace, or whatever is likely to be trivial.
My suggestion: stay away. To potential customers, I would say: Enjoy the luxury of being able to choose who you like for these para-medical purchases, but don't deliberately overpay in the hope of personal profit: that will only kill the luxury within a few years. To you, who sounds like you're considering being an investor or employee: I'm sure you can find companies to work for or invest in whose business model isn't "the people who choose us don't pay for us, and the people who pay for us can't afford to see if we're being dishonest or not."
but I'm not sure as to if this is something that could get me in trouble
This is unlikely to get you into trouble but definitely likely to be trouble for the Agent/Broker. Hence the request that you do not mention about this to Insurance Company as this could result in them loosing the Broker License and / or penalties.
health care benefits for things like Orthotics and Compression Stockings but they also give you a free "gift" that they tell you not to mention to your insurance company
The Health Insurance is governed at Centrally as well as at each Province. The Insurance Agents / Brokers are to act in your best interest and recommend you the right product. Most countries have strong regulations that prevent Insurance Agents / Brokers or companies to offer any incentives to prospective clients. Your friend by offer gift is violating some law. Although I couldn't find a exactly worded regulations, some information on insurance law about rebate being prohibited, All provinces except BC prohibiting and from brokers association about duties.
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