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Why Workers Comp Fraud Doesn’t Pay

Ask any business owner and he or she will tell you that insurance is not just about commercial general, professional, and employee liability or property coverage. Generally, it is legally mandatory for a business to acquire workers compensation coverage so that employees will be able to claim benefits in the event they incur a work related injury.

So, it’s a fact – workers comp is an important factor in any company’s insurance portfolio.

The problem lies when a worker files a fraudulent claim. And, unfortunately, it happens fairly often. But contrary to what many believe, workers comp fraud does not just impact businesses and bosses, and the employees that go about life in a totally honest manner, it also affects the faker. File a fake workers comp claim and you risk losing your job, spending time behind bars, and paying expensive fines. Trust those in the industry: crime – as it relates to workers comp – surely does not pay!

Below you will find some examples of employees that thought they could earn some bucks while fooling the system. In the long run, the hoax turned on them.

Fake Workers Comp Claim – True Scenarios

1. Marc was employed as a gardener. One day, he slipped and fell on the job. Complaining about associated pain that rendered him unable to work any longer, Marc submitted a workers comp claim. The process went rather smooth and it did not take long for Marc to begin receiving his disability benefits. Unbeknownst to Marc, however, the insurance company was after his tracks. After viewing surveillance video showing Marc actively doing gardening work for two other properties, Marc was called to task. Not only would the disability checks be curtailed, but he was sentenced to four months of jail time and ordered to pay over $39,000 in fines.

2. Jack complained about injuries he incurred at work. He said the resulting back pains made it impossible to continue his employment. Jack told the attending doctor that he had not experienced any pains prior to his work injuries. It didn’t take long for the insurance to offer proof that Jack was lying about his inability to work. The surveillance camera caught him working as a landscaper in the family business following the claim he made, resulting in a 3-year prison term and a $14,500 fine.

3. Sarah filed a workers comp claim after she received injuries to her back and leg while walking up a slope at the business’s outdoor facilities. When filing, Sarah failed to reckon with the ability of the insurance company’s investigation department. The department’s thorough work uncovered the true nature of the injuries: the injuries had been incurred before the date given on the claim and so were the discussions fellow employees had with her about them. Sarah was given 120 days jail time, plus 5 years of probation, plus a fine of $28,000!

Workers Comp Fraud

Workers’ compensation fraud refers to any deliberate act or misrepresentation intended to deceive an employer, insurance carrier, or the workers’ compensation system in order to obtain benefits or financial compensation that one is not entitled to. It can involve employees, employers, healthcare providers, or any other party involved in the workers’ compensation process. Some common types of workers’ compensation fraud include:

Employee Fraud: This occurs when an employee exaggerates or fabricates an injury, claims a non-work-related injury as work-related, or continues to receive benefits while working elsewhere without reporting it.
Employer Fraud: This involves employers misclassifying employees as independent contractors to avoid paying workers’ compensation insurance premiums or underreporting employee wages to reduce insurance costs.
Healthcare Provider Fraud: Healthcare providers can commit fraud by billing for services not provided, exaggerating the severity of an injury, providing unnecessary treatments, or engaging in kickback schemes.
Premium Fraud: This occurs when an employer deliberately provides false information to an insurance company to obtain lower insurance premiums or intentionally fails to obtain workers’ compensation coverage for their employees.

Workers’ compensation fraud is illegal and can have severe consequences. Penalties may include fines, imprisonment, restitution of fraudulently obtained benefits, and damage to one’s reputation.

If you suspect workers’ compensation fraud, it is important to report it to the appropriate authorities or your state’s workers’ compensation fraud division. They can investigate the matter and take appropriate action to address the fraudulent activity.

Workers Comp Insurance

Workers’ compensation insurance, also known as workers’ comp or workman’s comp, is a type of insurance that provides medical and wage replacement benefits to employees who suffer work-related injuries or illnesses. It is a legally mandated insurance coverage in most countries, including the United States.

The purpose of workers’ compensation insurance is to protect both employees and employers. It provides financial assistance to employees who are injured or fall ill as a result of their work activities, covering their medical expenses, rehabilitation costs, and a portion of their lost wages while they are unable to work. At the same time, it protects employers from potential lawsuits by establishing a system that compensates employees for work-related injuries without the need to prove fault or negligence on the part of the employer.

Workers’ compensation insurance is typically obtained by employers and is paid for by the employer. The specific requirements for workers’ comp insurance vary by jurisdiction, but most employers are legally obligated to carry it if they have a certain number of employees.

When an employee is injured on the job or develops a work-related illness, they can file a workers’ compensation claim with their employer’s insurance provider. The insurance company will then assess the claim, review medical records, and determine the appropriate benefits to be paid to the injured worker. These benefits may include coverage for medical treatments, rehabilitation services, disability benefits, and vocational training if necessary.

It’s important to note that workers’ compensation laws and regulations differ from one jurisdiction to another, so the specifics of coverage, claim procedures, and benefits can vary. If you have specific questions about workers’ compensation insurance in your jurisdiction or need assistance with a claim, it is advisable to consult with an attorney or insurance professional who specializes in workers’ compensation.