Knowledgebase-Divorced Employee Claimed He Was Married and Entitled to City-Sponsored Family Health Insurance Coverage


Information Product

Title:Divorced Employee Claimed He Was Married and Entitled to City-Sponsored Family Health Insurance Coverage
Summary:MTAS was asked whether it would be appropriate for the city to terminate an employee who falsely claimed that he was still married and therefore, entitled to city-sponsored family health insurance coverage, when, in fact, this employee was divorced.
Original Author:Bingham, Pamela
Co-Author:
Product Create Date:06/07/2000
Last Reviewed on::01/03/2017
Subject:Insurance--Health; Personnel; Personnel--Dismissal; Personnel--Fringe benefits
Type:Legal Opinion
Legal Opinion:

Reference Documents:

Text of Document: This is to memorialize our conversation this morning with respect to the questions you posed relative to two municipal employees.

False Insurance Claims

You have asked whether it would be appropriate for the city to terminate an employee who falsely claimed that he was still married and therefore, entitled to city-sponsored family health insurance coverage, when, in fact, this employee was divorced. It is undisputed that following the divorce, the employee’s former wife had substantial medical expenses which were subsequently billed to and paid for by the insurance company. It is also undisputed that a portion of the insurance premiums were paid by the city during this time period. Of course, the decision to terminate an employee is one which ultimately the city must make in light of all the facts and circumstances. However, in my opinion, there are ample grounds to terminate this employee, if that is your decision, based on his fraudulent misrepresentations.

T.C.A. 56-47-103 entitled “Unlawful insurance acts,” provides in part as follows:

(a) Any person who, knowingly and with intent to defraud, and for the purpose of depriving another of property or for pecuniary gain, commits or participates in or permits its employees or its agents to commit any of the following acts, has committed a fraudulent insurance act:

(1) Presents, causes to be presented or prepares with knowledge or belief that it will be presented, by or on behalf of an insured, insurer, claimant or applicant to an insurer or insurance professional in connection with an insurance transaction any information which contains false representations as to any material fact, or which withholds or conceals a material fact concerning any of the following:

(i) The application for, rating of or renewal of, any insurance policy;
(ii) A claim for payment or benefit pursuant to any insurance policy; or
(iii) Payments made in accordance with the terms of any insurance policy;

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(6) Presents, causes to be presented or prepares with knowledge or belief that it will be presented, by or on behalf of an insured or insurer, or insurance professional, to a claimant or any other person in connection with an insurance transaction, any information which contains false representations as to any material fact, or which withholds or conceals a material fact concerning any of the following:

(I) A claim for payment or benefit pursuant to any insurance policy; or
(ii) Payments made in accordance with the terms of any insurance policy.
(Emphasis added)
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The state statutes prescribe penalties and restitution for a conviction of insurance fraud. See T.C.A. 56-47-105; 56-47-106; 39-14-105. Assuming that there is a finding that the employee in question has allegedly has committed insurance fraud, which is also an act involving moral turpitude, it would appear that the city has adequate cause to terminate this individual.

Street Department Employee

This employee currently is on sick leave without pay, in accordance with a doctor’s report that has advised him to not work for several months because of back problems. Before requesting sick leave, the employee allegedly was involved in a fight while at home, and still in a city uniform. You have asked whether the employee can be fired based on the particular facts as you explained to me that involve the domestic fight. Again, the decision to terminate an individual for “unbecoming behavior” is probably defensible. However, since your city does give employees property rights in their jobs, and since this individual is not being paid at this time, it might be advisable to wait and ascertain whether any criminal charges are brought against the employee before taking any formal action. As you noted, since this employee is in an unpaid status while on leave, there is no harm in waiting until such time as any criminal charges are brought against this individual and then, learning what is the ultimate outcome of any such proceedings.

Please remember that these legal opinions were written based on the facts of a given city at a certain time. The laws referenced in any opinion may have changed or may not be applicable to your city or circumstances.

Always consult with your city attorney or an MTAS consultant before taking any action based on information contained in this database.