Benefits administration has become a favorite target for scammers. Open enrollment, COBRA notices, insurance verifications, and payroll changes all involve sensitive personal information and time-sensitive decisions. That combination makes benefits communications especially appealing to bad actors and places HR teams on the front line of defense.
Understanding common scam patterns can help HR professionals spot issues early and protect both employees and the organization.
Fake Open Enrollment Notices
Scammers often send emails or texts that appear to come from HR, a benefits administrator, or an insurance carrier. These messages may claim that open enrollment is ending soon, that an employee’s coverage will lapse, or that action is required to avoid losing benefits. Red flags include links that do not match your organization’s enrollment platform, unfamiliar sender addresses, generic greetings, or messages sent outside your normal enrollment window.
HR teams should be cautious of any enrollment-related communication that bypasses established systems or asks employees to re-enter Social Security numbers, bank information, or login credentials.
Suspicious COBRA Communications
COBRA scams frequently target former employees or those who recently experienced a qualifying event. Fraudulent messages may request payment through unusual methods, such as gift cards or peer-to-peer payment apps, or direct individuals to websites that closely resemble legitimate COBRA vendors.
A common warning sign is urgency combined with threats, such as immediate loss of coverage or legal consequences. Legitimate COBRA notices follow a specific timeline and do not pressure individuals to act within hours or provide payment through informal channels.
Insurance and Benefits “Verification” Requests
Another common tactic involves phone calls or emails claiming to verify coverage details. These requests may reference real plan names or carriers but ask for information that insurers or administrators already have. HR professionals should be wary of requests for full Social Security numbers, banking details, or employee login credentials, especially when initiated unexpectedly.
Verification requests should always be routed through known contacts and established vendor processes rather than handled ad hoc.
Best Practices for HR Teams
Consistency is one of the most effective defenses. Employees should know exactly how and where official benefits communications are delivered. HR teams should regularly remind employees that legitimate notices will not ask for passwords, require immediate payment, or come from personal email addresses.
Encouraging prompt reporting is equally important. Employees should feel comfortable flagging suspicious messages, even if they are unsure. Early reporting can prevent a single message from turning into a broader issue.
By staying alert to these red flags and reinforcing clear communication practices, HR professionals can play a meaningful role in reducing the risk of benefits-related scams and protecting employee trust.
Benefit Allocation Systems (BAS) provides best-in-class, online solutions for: Employee Benefits Enrollment; COBRA; Flexible Spending Accounts (FSAs); Health Reimbursement Accounts (HRAs); Leave of Absence Premium Billing (LOA); Affordable Care Act Record Keeping, Compliance & IRS Reporting (ACA); Group Insurance Premium Billing; Property & Casualty Premium Billing; and Payroll Integration.
MyEnroll360 can Integrate with any insurance carrier for enrollment eligibility management (e.g., Blue Cross, Blue Shield, Aetna, United Health Care, Kaiser, CIGNA and many others), and integrate with any payroll system for enrollment deduction management (e.g., Workday, ADP, Paylocity, PayCor, UKG, and many others).
This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.
