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Workers Indicted for Defrauding Employer-Sponsored Wellness Program

The employees are accused of falsely reporting that they participated in healthy activities in order to earn rewards through a wellness program included in their employee health insurance plans.

December 20, 2012
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Six Kansas City, Missouri, employees and one Jackson County, Missouri, employee were indicted last week for allegedly defrauding their employer-sponsored wellness program.

The employees are accused of falsely reporting that they participated in healthy activities in order to earn rewards through a wellness program included in their employee health insurance plans, according to an indictment filed Dec. 12 in a U.S. District Court for the Western District of Missouri.

The wellness program was established in 2010 and is managed by Kansas City, Missouri-based Blue Cross and Blue Shield of Kansas City, which insures group health benefits plans for employees of Jackson County and the city of Kansas City. The program offers employees and their dependents financial rewards in the form of preloaded debit cards worth up to $250 based on a points system keyed to participation in healthy activities. Under the program, more strenuous activities such as marathons and triathlons are worth as many as 10,000 points per activity.

The grand jury's indictment alleges that within six months of the program's inception, several employees began falsifying records to indicate that they had completed the most strenuous activities in order to maximize the number of gift and debit cards they could earn. According to court documents, some employees also submitted false participation records on behalf of their dependents, including their children.

All told, the indictment alleges that the seven employees named as defendants collected more than $310,000 in ill-gotten gift and debit cards.

Among the seven, Kansas City Municipal Court employee Crystal Burgin-Woods is alleged to have individually collected more than $185,000. In addition to falsifying her own participation records, Burgin-Woods allegedly submitted records on behalf of three children between ages 3 and 4, claiming that each had completed a combination of duathlons, marathons and triathlons.

Similar allegations were made against Kansas City employees Matt Stivers, Kim Blair, Matt Tholen, Michael King and Sylvia Sims, as well as Jackson County employee Michael Olukotun.

"We are very saddened with the allegations brought upon a small group of city employees," Tony Schrute, city manager for Kansas City, said in a statement released Dec. 13.

Schrute's statement noted that no public funds were lost in the alleged scam.

"These alleged actions do not represent the majority of city employees who adhere to the city's ethical standards," he said.

Matt Dunning writes for Business Insurance, a sister publication of Workforce Management. Comment below or email editors@workforce.com.

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