Workers comp: Signs your co-worker could be a fraud
Across the U.S., compensation for workplace injuries totals hundreds of billions annually. In some states, the total is more than $675 million, according to statistics from the U.S. Department of Labor.
Because of the scope and complexity of the issue, there are some who try to take advantage of the system. In the U.S., insurance fraud is a problem estimated at more than $40 billion a year, states the FBI. While the majority of U.S. workers and employers are honest, workers compensation fraud schemes still amount to billions of dollars each year, reports the Coalition Against Insurance Fraud.
The coalition explains getting exact numbers is difficult because there is no single national agency that compiles overall fraud statistics. The FBI estimates insurance fraud costs the average U.S. family between $400 and $700 a year in increased insurance premiums.
“Being proactive is the best way to prevent workers’ compensation fraud,” says Mark Kendall, assistant vice president and associate general counsel at CopperPoint Insurance Companies. Kendall suggests the process starts with hiring top-quality workers as well as asking references about the potential employee’s honesty.
Workers compensation fraud can take many forms, explains Bridget Miller, writing for HR Daily Advisor. Some of the more common examples include:
- Exaggerating the severity of an injury and continuing to collect benefits while physically able to return to work.
- Claiming workers compensation for old injuries or for injuries that were not job-related.
- Falsifying injuries or intentionally causing injuries.
To minimize the potential for fraud, Kendall says employers should have a zero-tolerance policy for fraud and should have clear policies about workers compensation.
Employers can also take these steps to foster integrity in the workers compensation process.
- Get to know employees. Listen to them and follow up on rumors of disgruntled workers.
- Keep workers positively motivated and happy.
- Ask questions about injuries.
- Reconstruct and thoroughly investigate all workplace injuries.
- Avoid letting employees work alone.
Sometimes there are warning signs that a workers compensation claim could be fraudulent. For example, a claim is filed Monday morning for an injury that allegedly occurred early Monday morning or late Friday afternoon. Kendall says other red flags employers can watch for include:
- Accidents with no witnesses where the employee’s description does not reasonably support the cause of the injury.
- Incidents with conflicting descriptions of what occurred.
- A claimant who has a history of questionable or litigated claims.
- An employee delayed reporting the claim with no reasonable explanation.
Of course, employers can also be guilty of workers compensation fraud. The coalition notes some businesses illegally try to avoid paying full state-required workers compensation premiums by misclassifying employees as independent contractors or by classifying workers in high-risk categories as low risk.
Kendall notes that if you suspect insurance fraud, you can report it to the Arizona Department of Insurance Fraud Unit by calling (602) 364-2140.
Additionally, if you suspect insurance fraud relating to a CopperPointpolicy or claim, you can call CopperPoint’s workers compensation fraud investigation hotline at (800) 526-5226.
About CopperPoint: Founded in 1925, CopperPoint Insurance Companies is Arizona’s premier provider of workers compensation insurance. For over 90 years, CopperPoint has been a trusted partner for Arizona companies to protect what matters most: their businesses and employees. As a leading advocate of workplace safety, CopperPoint is proactive in building a culture of safety throughout Arizona and in keeping the state’s workers compensation insurance rates affordable. In doing so, CopperPoint delivers peace of mind to more than 12,000 businesses and their employees.