In recent years, workers’ compensation insurance fraud has been on the rise.
It can take many forms and be challenging to detect, leaving employers and employees vulnerable.
To help protect yourself, it’s essential to understand different fraud examples and measures you can take to prevent them. Let’s look at five common examples of workers’ compensation fraud.
1 – Misrepresenting An Injury or Illness
One type of worker’s compensation fraud commonly seen is when an employee misrepresents or exaggerates an illness. This deception can be challenging to detect as the injury may be internal rather than physical. However, if employers know the signs, there are ways to confirm legitimate injuries, including medical evaluations from trusted physicians and requests for medical records.
2 – Falsifying Treatment Records
While most people who injure themselves on the job or are in desperate need of the medical benefits that come with workers’ compensation, some opportunists try to abuse and exploit the system. One instance of abuse is when an employee falsified treatment records to receive compensation to which they are not entitled.
This kind of workers’ comp fraud is unethical and punishable. It affects the employer’s costs and pads insurance fraud claims, and robs funds from those hurt and legitimately entitled to these benefits. In addition, it can create a lack of trust between employees and employers, making them less likely to submit genuine claims for fear their integrity will be questioned.
3 – Creating Fictitious Witnesses
One of the many types of worker’s compensation fraud occurs when a person fabricates witnesses to support their false claim for benefits. This can involve either creating phony identities or presenting inaccurate statements from existing individuals to create the illusion that the bogus claims are based on truthful accounts.
4 – Misrepresenting Work Status
An individual may claim to have sustained an injury or illness at their workplace when, in truth, it occurred elsewhere. By misrepresenting the facts and their working status, individuals make fraudulent compensation claims which affect businesses negatively. Conversely, companies rely on legitimate claims that accurately reflect the facts of the case so they can assess liability and pay the appropriate compensation according to the law.
5 – Working While on Leave
They are working while on leave is an unfortunate form of worker’s compensation fraud. It occurs when an employee continues to work in some capacity while still receiving worker’s compensation payments for a prior injury or illness. The payments are supposed to cover lost wages if the employee cannot work due to injury or illness. Yet, many will ignore this stipulation and continue working regardless, perpetuating fraud against the injured party.
Conclusion: Beware Of Fraudsters
Fraudulent activities like these can put both employers and employees at risk of financial losses due to increased premiums, decreased benefits, and legal proceedings against those involved in the scheme if caught. The best defense against these types of schemes is prevention through solid policies and procedures designed specifically with workers’ compensation fraud prevention in mind. Be sure you know your rights and responsibilities so you can protect yourself from potential fraud.