Worker's Compensation insurance protects employees who are hurt on the job. Valuable employee benefits pay for medical expenses, lost wages and other expenses while worker recovers.
Most employers and their employees are very honest. Only a small number scammed this coverage for personal profit, but the damage they cause is enormous.
Worker's Compensation fraud is a common crime in America today. Billions of dollars in false claims and unpaid premiums are stolen every year.
Insurance scams are forcing premiums higher, draining business profits and costing honest employees their pay and jobs.
And because of this, you pay higher prices at the cash register. The high cost of fraud are passed on to all consumers.
Dishonest employees will knowingly make false claims for workplace injuries against their employers workers compensation policies.
The biggest motive is free money. Dishonest employees often secretly take on a second job or open a side business while falsely claiming there too injured to work their current job position. So, the injured employee stays home all day and receives lost wages from their Worker's Compensation policy.
Another lure to commit worker’s compensation fraud is that you can take a vacation while receiving benefits. Dishonest employees collect insurance money and claim their disabled while pursuing hobbies, sports or other personal activities. Like skydiving, playing soccer, weightlifting or remodeling their home while allegedly injured.
How fake claims work
Injuries off the job:
Employees get injured off the job, but say that there injury occurred while at work and their Worker's Compensation policy covers the medical bills. An employee might hurt his neck lifting a heavy box while cleaning the addict. Or maybe sprains and ankle during a softball game. Then pretends the injury happened at a loading dock at their place of employment.
An employee has a fairly minor job injury, maybe a slight twinge in their lower back, but, insists their back is seriously sprained. This allows the employee to collect additional workers compensation money and stay off the job longer.
Some workers simply invent injuries. Soft tissue injuries such as muscle injuries with the back and neck are popular scams. They're hard to disprove, and easy to get away with.
Sometimes an employee with an old injury that never quite healed will claim he just got hurt on the job, i.e. damaged knees or shoulders, for instance.
Procrastination or Malingering:
Basically, this is Gold bricking. Staying at home longer pretending you're still disabled, even though you've healed enough to return to work.
Dishonest business owners will illegally reduce the Worker's Compensation premiums they owe.
Employers who swindle premiums can be hard to discover. Many businesses often hide their premium scans behind dummy corporations, fake accounting, tax records and other coverups.
These cons often are complex and well hidden. They can take much time, effort and financial expertise to discover, and convict in court.
Why get mad?
Bogus injury claims far outnumber premium scams, but most premium scams are for much larger amounts.
Just one premium swindle can steal several hundred thousand dollars in unpaid premiums in one year. Some premium swindles last for several years - thus stealing millions. A worker's bogus injury claim, however, normally steals $2,000-$50,000 total.
How premium scams work
A dishonest business owner tells the workers comp insurer that many employees work safer jobs than they really do. i.e. A construction firm classifies crane operators as file clerks.
A business says it has fewer employees or a lower payroll than it actually does. i.e. A business owner hides employees by saying they work for a seemingly legitimate dummy firm he created. The owner may falsely claim the workers are independent contractors, and thus don't count toward employers workers comp premiums.
A business simply doesn't buy state-required workers comp insurance, hoping state officials won't notice. This leaves workers dangerously exposed if they're injured without insurance.
Crooked doctors & lawyers
Dishonest medical clinics (also called medical mills) and lawyers often team up to scam workers compensation insurance. These often are well-organized criminal gangs. One gang can steal millions of dollars a year.
How doctor & lawyer scams work
Clinics may inflate the seriousness of real injuries to workers, then bill insurers for costly and worthless treatments and tests. A given treatment may be more expensive than needed, or clinics may order more treatments than necessary.
Clinics may bill insurance for treatment of injuries that never happened.
Dishonest lawyers working with dishonest clinics encourage uninjured workers to seek useless treatment for scams. The lawyers then may threaten to sue unless the insurance company settles the phony claim quickly. They gamble that the insurer will decide it's cheaper to settle than face an expensive lawsuit involving a jury that may be sympathetic to a worker.
Dishonest clinics and lawyers hire recruiters (also called runners) to bring workers into the scams. The runners receive illegal kickbacks for referring patients to the lawyers or clinics. Sometimes the workers are part of the swindle, and sometimes they don't realize a swindle is taking place.
Some clinics are bogus. They have no licensed doctors. The office also has little useful medical equipment, and gives almost no helpful or needed treatment. The clinic is merely a staging ground for fake workers comp claims.
The price you pay
We all pay a price for workers comp fraud.
Businesses pay higher workers comp premiums because insurers pass the high costs of fraud onto their policyholders. Often the premium increases are large and very damaging - especially for smaller businesses that can least afford higher premiums.
Consumers pay higher prices for goods and services when businesses pass their higher premium costs onto customers.
Employees lose jobs because businesses often must reduce their workforce, move to another state, or even go bankrupt because of higher premiums.
Business owners freeze or reduce employee pay as they try to offset the often sharply higher cost of premiums.
Workers can find their health, safety and life savings threatened. They could have a serious work injury but no coverage because their employer illegally avoids buying insurance.
Higher workers comp premiums depress a firm's income, lower employee productivity, and force some companies to go out of business. Honest businesses also find it harder to compete against dishonest firms that lower costs by illegally avoiding workers comp premiums.
Some workers comp programs are government-run. Thus they're supported by tax dollars. This means your tax dollars are being stolen — hundreds of millions a year.
Workers work harder:
Guess who takes up the slack when a fellow worker leaves the job with a fake injury? Co-workers, who may have to pull extra duty.
Dumb and dumber
Employees and business owners can pay a high price for committing fraud. You can lose everything with one dishonest act.
You get caught:
Insurers aggressively pursue suspicious claims and premium scams. Employees committing injury fraud have a good chance of getting caught.
Workers comp fraud is a crime, which can mean serious jail time if you're convicted.
You may have to pay large fines and repay the stolen money if you're convicted.
You'll lose your job and income if you're convicted of making a fake claim.
Your business could close down or be seriously damaged if you're convicted. Your hard work and dreams are all thrown away with one dumb act of fraud.
Conviction means a criminal record, which can harm your chances when applying for future jobs — jobs you may need to support a family or keep your career going.
You can't support your family if you lose your job and go to jail. Your kids, friends and neighbors also know you're a convicted crook — someone they should look up to as a role model.
The high cost of fraud can damage your employer. It can also cost you in lower pay — and even jeopardize your job. Help your employer fight workers comp fraud.
Contact your supervisor or insurance company's fraud hotline immediately if you suspect someone's committed a scam. Include as many details as possible. Don't wait, the trail may get cold.
Watch for medical mills:
Be wary if a doctor wants tests or treatments that seem excessive for your injury… Avoid lawyers who aggressively recruit you for treatment at a specific clinic… Keep records of your visits and treatments, and compare to the statements the insurer sends you.
If you're hurt on the job, seek the treatment and compensation you deserve, and know your rights as an injured worker in your state.
A happy workforce reduces the odds of workers compensation fraud at your business. So help to create a safe and supportive workplace. Specifically…
Show you care about safety and your employees. Build strong teamwork among your employees about safety. Equally important, be clear that you won't tolerate fraud.
Build partnerships with employees:
Create a safety program. Listen to employee complaints. Correct safety problems now. Show you care about good working conditions.
Inform employees that your company has zero tolerance for fraud. Scams cheat their company — and threaten their jobs.
Check job applicants carefully:
Criminal backgrounds and a history of suspicious injury claims can be good predictors of potential fraud.
Require workers to report all job accidents immediately — and get them treatment promptly.
Show employees how to report suspected fraud confidentially. Prominently place your insurer's fraud hotline number around the workplace, but don't go overboard. Honest workers may find it offensive if all workers comp claims are treated with suspicion.
Alert your insurer:
Let your insurance company know about suspicious claims immediately. Encourage active investigation of suspect claims.
Give employees written safety and anti-fraud policies & procedures.
Reward fraud tips:
Consider an employee reward program for reporting suspicious claims that lead to conviction.
Know the warning signals:
Employers should know the warning signals of suspicious claims. Obtain a list of fraud indicators from your workers comp insurer.
Verify your insurer:
Make sure your workers comp insurer is licensed in your state. Contact your state insurance department. You don't want to be sold fake or unauthorized insurance.
Original News Source: http://www.insurancefraud.org/scam-alerts-workers-compensation.htm