Can We Fire Employees for Submitting Duplicate Insurance Bills? Understanding Termination Rules

In my company, a lot of employees submitted duplicate bills to the medical insurance company, which is a corporate medical company. Now, the insurance company is pressuring us to terminate all those employees because they conducted fraud with the insurance company. What are the termination rules, and can we terminate an employee on these grounds? Please mention in detail.

Understanding Misconduct in Employment

In the realm of employment, misconduct refers to any acts or omissions by employees during the course of their employment as set out or enumerated in the service regulations. Punishment, ranging from minor to major, such as censure to dismissal, is the consequence of any misconduct depending on its gravity after duly following a set of disciplinary actions in tune with the Principles of Natural Justice.

Therefore, it is very important that the misconduct should have been committed by the employee within the zone of his employment. As man is a social animal, it is impossible to predict his behavior or conduct all the time in all situations. Hence, the employer cannot be a moral policeman of the conduct of his employees outside the employment zone. However, it is an accepted legal dictum that if the employee indulges himself elsewhere in any act prohibited by law and gets sentenced to any severe punishment like imprisonment, of course, the employer can terminate his services. But, it is consequential only after a trial and conviction by a competent Court of Law in this regard and not on the mere request of a third party like an insurer.

Sir,

Medical insurance is a group policy that the company provides to all employees. This means that the company is the direct buyer of the corporate policy and provides it to the employees. Under this policy, workers submit duplicate bills to the insurance company.

From your reply, I understand that the premium for this Group Health Insurance Policy has been paid by the employer as a welfare measure. The Insurance Company contends that some of the insured persons/employees submitted false claims with bogus bills. The insurer's first step in this regard would likely be the rejection of such false claims and cancellation of the insurance cover for those individuals. The question arises whether this action would be taken by the insurer directly with notification to the employer or through the employer.

Apart from that, it is my opinion that this is a contentious and complicated issue because alleged false claims would have been based on prescriptions by doctors and cash bills issued by medical shops. Is the insurer questioning the validity of the doctors' prescriptions, the authenticity of the bills, or both? If so, how did the insurer reach its conclusion – through their own doctors' opinions or based on an investigation they conducted? Were copies of such documents attached to the letter requesting the management to terminate their services promptly?

If the employer chooses to act on the insurer's request, it would undoubtedly lead to a cumbersome disciplinary process. The primary challenge would be establishing the veracity of the claims, while the secondary issue would be that this is a dispute between the insurer and the insured, with the employer having no direct involvement except for remitting the premiums as a welfare measure, either independently or as per the terms of any collective bargaining agreement with the employees. Is the management willing to engage in such a laborious exercise solely at the insurer's behest?

Certainly, the management has the right to demand explanations from the employees, considering that the premiums were paid on their behalf. If the employees unequivocally admit to the wrongdoing, it is my personal view that the management could, at most, immediately cease providing this benefit to those employees due to their misuse of it.

Background and Current Situation

I am working in an MNC company that provides a group health policy to its employees. In 2011, I submitted a claim to the health insurance company with some fraudulent documents, and the claim was settled. The amount was deposited into my account. Later, when I submitted another claim, the insurance company had doubts and conducted an inquiry through a third party. It was discovered that the documents I submitted for both claims were duplicates. A third-party member contacted me, informed me about the investigation, and requested that I withdraw my current claim and repay the amount from the first claim.

I agreed to their condition that they would not disclose my name to the company, and the third-party member accepted. I gave the person a cheque for the amount I received from my first claim. The person sent me an email stating they would not contact me again, submitted the cheque to the insurance company, and the amount was deducted from my account.

After these events, I tried to move on and continued working. During this time, the company revised my policy every year, and I also made a claim for my baby, which was approved. This led me to believe that the matters from 2011 had been resolved.

Current Issue with Company Closure

However, in 2019, my company announced its closure and started pressuring employees to take the VSS/VRS scheme. In this situation, the company requested a list of employees involved in any fraud with the insurance company, and my name appeared on the list. The company is now pressuring me to accept the VSS/VRS scheme, threatening termination if I refuse.

Questions Regarding Fraud and Termination

1) After 8 years, is there any basis for a fraud case?
2) Since the insurance company settled the matter by recovering the amount, is there still a reason for a case?
3) Is the company authorized to terminate an employee for submitting duplicate documents to the insurance company?

Hi, thank you very much. I am sending my situation; please guide me.

In 2011, I submitted a claim to the health insurance company with some fraudulent documents. The claim was settled, and the amount I claimed was deposited into my account. After some time, I submitted another claim, but this time the insurance company had doubts and conducted an inquiry through a third party. During the inquiry, it was discovered that the documents submitted in both claims were duplicates. A member of the third party contacted me, explained the inquiry findings, and asked me to withdraw my current claim and repay the amount from the first claim.

I agreed to the condition that my name would not be disclosed to the company, and the third party member accepted. I gave them a cheque for the amount I received from my first claim. They sent me an email confirming that they would not contact me again, and the amount was deducted from my account.

After this incident, I moved on and continued working. Over the years, the company revised my policy annually, and I also made successful claims for my baby. I believed that the matters from 2011 had been resolved.

However, in 2019, the company announced its closure and started pressuring employees to opt for the VSS/VRS scheme. They requested a list of employees who had been involved in insurance fraud, and my name appeared on the list. The company is now pressuring me to take the VSS/VRS or face termination.

My questions are:

1) After 8 years, is there still a reason for a fraud case?
2) Considering the insurance company settled the matter by recovering the amount, is there still a case?
3) Can the company terminate an employee for submitting duplicate documents to the insurance company, or can they only stop the medical policy?

I admit to submitting fraudulent documents. In this situation, what should I do? Should I accept the VSS/VRS or oppose it and challenge the termination in court?

Thank you.