Are You Getting Ripped Off by Workers’ Compensation Fraud?

Posted on Friday, May 17, 2019

It is Workers' Compensation claims experience that determines Workers' Compensation insurance premiums. This means that if workers are fraudulently collecting benefits, ultimately, it comes out of employers' pockets.

The fact is, fraudsters and criminals frequently target the Workers' Compensation system for abuse. Twenty-five percent of all insurance fraud cases in the United States arise from Workers' Compensation, costing employers over $25 billion every year.

Here are some significant warning signs:

1. Monday morning injuries or injuries on the first day after a return from vacation. Workers sometimes get hurt over the weekend and then feign an injury on the job in order to qualify for Workers' Compensation benefits. You may want to discretely ask other employees about how the injured individual was acting just prior to the incident he or she claims resulted in the injury. If the injury was already apparent -- for example, the employee may have been seen limping into the building before work, and then claim to have fallen on the job and injured an ankle -- chances are good the claim is fraudulent.

2. Workers with dangerous hobbies. Workers who race motorcycles on weekends, or ski, or who engage in vigorous contact sports may attempt to ascribe injuries incurred during leisure time to work-related events in order to qualify for Workers' Compensation benefits.

3. Disgruntled or discouraged workers. Was the individual recently disciplined, passed over for promotion, or denied a pay raise? Some employees take out their frustrations with their employer by abusing the Workers' Comp system. Workers are particularly prone to file fraudulent or questionable claims immediately after being notified of a layoff.

4. Accidents with no witnesses. If a worker is normally almost never alone on the job, be skeptical of accidents that strangely occur when no one else is around to witness them.

5. Multiple claims. Workers who file more than twice are also more likely to file again. However, multiple claims for similar injuries should prompt an investigation into what could be done to prevent legitimate injuries from recurring. For example, an employee could potentially file multiple claims related to carpal tunnel syndrome, which could be completely legitimate -- especially where the employer has not taken steps to reduce or mitigate the risk of repetitive motion injuries.

6. Contact issues. Is the claimant hard to reach during business hours? Never home, despite a disabling injury?

What to Do if You Suspect Fraud

In the event you suspect fraud, contact your state's department of workforce development or Workers' Compensation officials. You can get a listing of every state's labor department points of contact via the U.S. Department of Labor website.

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Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.

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