Workers' Compensation FraudHR Resource
June 14, 2012 — 2,449 views
Workers' compensation insurance fraud occurs when a person uses a fake injury or a non-work injury in order to make a personal financial gain. This can occur in both simple and complex schemes that often require lengthy investigation. All kinds of people have committed workers' compensation fraud, from blue-collar employees who have fabricated an injury altogether or who have inflated the seriousness of an injury, to white-collar professionals such as lawyers and doctors who have conspired with others to cheat the system, explains the California Department of Insurance. This could be in the form of reporting non-performed treatment or lying about the extent of an injury.
It's unfortunate that anyone takes advantage of the workers' compensation system, as it protects and provides real benefits to employees who truly need it. The Coalition Against Insurance Fraud explains it is one of the most valued employee benefits as it pays for lost wages, medical expenses and other expenses while the employee heals, and most workers and employers are very honest. The problem is workers' compensation fraud is currently a large crime in this country and as people continue to try to cheat the system, premiums continue to rise - hurting all workers and consumers.
According to the source, a worker's bogus injury claim typically steals between $2,000 and $50,000 total. However, a premium insurance scheme can last for several years and steal millions. This is not only a problem for the insurance company, the people paying higher premiums and taxpayers, but it can also weaken an honest business in terms of income and employee productivity.
There are things employers and human resources managers can do to detect and properly handle workers compensation fraud. Preventative steps for fraud can be taken during the hiring process by doing criminal background checks and investigating any previous injury claims. Employers should strive to maintain good working conditions to show they care about workers and work to build a partnership with employees so they can feel comfortable with making legitimate complaints. It may also be a good idea to show workers how they can report suspected fraud confidentially and consider an employee reward program for making these reports.
Human resources managers should always be on the lookout for the warning signals of suspicious claims such as multiple claims, a long history of unrelated claims and the employee has exhausted other forms of leave. The workers' compensation insurer should be able to provide the employer with a list of common indicators of fraud.