workers comp fraud

Some industries are more prone to worker injuries than others, but even employees who sit most of the day could fall victim to workplace hazards resulting in slip and fall injuries or repetitive stress issues. The potential for injury also opens the door to potential workers’ compensation insurance fraud.

What is Workers’ Compensation Fraud?

With costs to American businesses topping $30 billion annually, workers’ compensation insurance fraud is a weighty issue. Employee claim fraud is the most common type of fraud. This is when an employee falsely claims a work-related injury in order to collect benefits that he or she is not entitled to receive. This type of fraud can cause employers’ insurance premiums to rise and can ultimately create issues for workers with legitimate job-related injuries.

Red Flags

Most workers’ comp claims are legitimate, but a combination of two or more of these red flags could signal a fraudulent claim:

  • Injuries occur on Monday morning or Friday afternoon
  • The accident is reported before or just after termination or a project’s conclusion
  • There are no witnesses to the injury
  • The claim is not filed in a timely manner
  • The employee is difficult to reach at home
  • The accident description doesn’t match the injury
  • The claimant refuses medical attention or diagnostic procedure
  • The employee is new, works a second job, or is frequently absent
  • The employee has a history of changing doctors, jobs, or addresses

How to Be Proactive

To help avoid a work environment that is conducive to fraud, follow these proactive tips:

  • Conduct an incident investigation any time there is an injury. This will help to reveal any suspicious details surrounding a workplace accident and will uncover root causes to help prevent future incidents.
  • Create a zero-tolerance policy for fraud, documented in writing.
  • Cultivate a safe work culture where all employees understand how to minimize risks and accidents.
  • Promote safe and anonymous channels for employees to report fraud suspicions.

How to Report Fraud

If the red flags and investigation result in suspicion of claim-related fraud, the employer should report concerns to their legal counsel and workers’ compensation insurance carrier right away. Most insurance carriers have an investigative unit dedicated to researching potential fraud cases. Fraud suspicions can also be reported to the state; most states have fraud reporting forms on their Department of Labor websites, and government agencies maintain confidentiality of all investigations. Terminating an employee prior to completing a thorough legal investigation can result in more risk, so fraud professionals should be allowed to take the reins at this point. If fraud is uncovered in the investigation, the case may be forwarded to the Attorney General for prosecution. Ultimately, fines that result from prosecution go to a special fund to help cover workers’ compensation law.

Employers can help fight fraud with proactive procedures, such as screening employees, investigating accidents, and creating a culture that values honesty and communication.

About InsureMyWorkComp 

InsureMyWorkComp is a digital brokerage that helps clients find the right workers’ compensation solution for their business needs. Unlike other online platforms, we will help you to work with an agent who can provide you the right solution for your risk profile. Our staff has over 50 years of workers’ compensation underwriting and sales experience, and we are confident that we will provide you the support that you need. For more information or to get a quote, contact us today at (855) 340-9138. 

Social Title: How to Handle Suspicions of Workers’ Comp Insurance Fraud

Social Description: Workers’ compensation fraud has serious consequences for businesses and can harm innocent employees with legitimate claims. Read on for more information.