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Fort Myers Criminal Defense Lawyer / Blog / Federal Crimes / Why withholding health care benefit payments Is a crime

Why withholding health care benefit payments Is a crime

Group health insurance plans are a good idea for businesses looking to take better care of their employees. They can provide medical coverage to plan members when needed and can be supplemented with other coverage options such as for vision, dental and pharmacy needs.

Employers usually collect from their employees to pay for group health insurance. But this system is ripe for abuse. It’s not unheard of for someone with access to employee benefits payments to pocket the cash.

Stealing or embezzling payments for group health insurance isn’t just a criminal offense – it’s a federal offense.

Federal law on health care benefits payment theft

Per the U.S. Code, anyone who embezzles, steals or converts any money, securities, credits, or assets of a health care benefit program violates the law.

“Health care benefit program” can refer to any type of health plan, whether public or private, which provides medical benefits, items or services to employee policyholders and their plan members. So whether it’s a government-sponsored health program like Medicare or a group health insurance plan purchased from an insurer, it’s illegal for anyone to pocket payments.

By this definition, employers could get into trouble with the law if they withhold their employees’ healthcare benefits payments for whatever reason.

The penalties

Anyone convicted of embezzling health care benefit fund money or assets will face a fine set by a federal court, plus up to a year of prison for theft that doesn’t exceed $100. For theft over $100, the convicted must pay a court-defined fine and serve up to 10 years in prison. Because health care benefit costs easily go above $100, the latter penalty will likely apply to severe theft cases.

Federal law doesn’t make any distinctions between stolen or withheld benefits payments. Companies that break the law can face criminal charges even for an honest mistake like missed payments.

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