Workers Compensation Fraud fraud is the most talked about type of insurance fraud. It is also the type that most employers are in the best position to help uncover. Workers Compensation Fraud occurs when employees knowingly lie about an injury while at work or falsify an injury report to collect Workers Compensation benefits. The employees may claim that the fraudulent injury was work-related when it wasn't. Many times the employee is injured while off of the clock or not working over the weekend and instead of going to the hospital, they wait until Monday to pretend it happened at work. Some employees exaggerate an actual injury that has already healed in order to continue receiving Workers Compensation Benefits instead of returning to work.
Many employers believe that the longer an employee stays out of work and continues to collect benefits, the more likely the claim was fraudulent or that the employee has had ample time to heal and is continuing to pretend that they are injured. Under Connecticut State Law, injured employees don't have to get back on the job until the doctor releases them to work.
There is no sure-fire way to identify fraud without proof or evidence, however, there are several red flags. Employers should call their carriers (the insurance company handling their Workers Compensation Policy for their company) immediately if they identify two or more of these flags.
1. Disgruntled employee. The employee has a motive to fabricate the claim. Perhaps he or she was denied vacation time, demoted or fired.
2. Employee is difficult to contact at home. Any employee that is on Workers Compensation benefits past the point of being able to work light duty, should be spending their time mostly at home trying to heal their injuries. If you cannot reach them at home most days, the employee may be working another job, under the table, while collecting benefits from the employer. This practice, called "double-dipping," constitutes fraud.
3. New employee. Statistically, the newer the employee is, the more likely the claim is fraudulent, especially if other red flags appear. Many times, employees seek out job positions where they can work for the allocated amount of time to qualify them for Workers Compensation Benefits. Once that time has arrived, the employee will fake an injury and attempt to stay home and collect from the employer.
4. No witnesses. Make note of alleged accidents with no witnesses, especially if the employee's duties rarely call for him or her to work alone.
5. Varying accounts of accident. The injured employee may describe the accident differently to the employer and the doctor, or witnesses' accounts may differ from the injured worker's account.
6. Accidents on Fridays or Mondays. Accidents that occur on Fridays or Mondays should raise suspicion, especially if other red flags appear. Many times, employees will fake and injury just to get the weekend or days before or following a weekend off with pay.
1. It is easier to prevent Workers Compensation Fraud than it is to prove it. Employers should make sure all new hires have the proper skills and character they want in their employees. A sound hiring policy is the best place to start.
2. Hire wisely. Conduct Background Investigations on applicants, and verify references.
3. Focus on safety. Making the workplace safer reduces the chance of accidents and the opportunity for someone to fake an injury.
4. Develop a return-to-work policy. Tell job candidates that if they get injured on the job, the company will work with the doctor to help them return to work as soon as medically reasonable.
5. Educate, don't threaten. Explain that workers compensation fraud hurts everyone, not just the insurance carrier. Let employees know that fraudulent claims can force employers to decrease benefits, lay off employees, or go out of business.
6. Adopt a zero-tolerance policy. Make it clear that fraud can carry serious consequences, including termination and prosecution. Make sure you post in clear areas your policies and make employees sign documents to those policies.
7. Stay in touch. Keep regular contact with employees who are off work due to an injury. Document each contact or attempted contact. Injured workers who are difficult to contact or who are belligerent may be committing workers compensation fraud.
8. R.C. Ranno Investigative Services, (800) 572-8806, is Connecticut's leader in uncovering Workers' Compensation Fraud. Contact our agency today for more information or for a price quote on our investigative services.