Small Business > Workers' Comp Fraud
Employees pretending to be injured, employers misreporting payroll, and genuinely injured workers extending their benefits after they are better are all forms of workers’ compensation fraud. The National Insurance Crime Bureau estimates that workers’ compensation fraud costs the insurance industry $5 billion per year. These losses then get transferred to the people holding the policies. According to the Insurance Information Institute, 10 cents of every dollar paid in premiums is wasted paying for fraud.
There are three main types of workers’ compensation fraud, and they illustrate that fraud isn’t perpetrated only by employees.
This is committed by employers who alter their payroll information to lower their premiums, misclassify workers, or lie about prior claims.
Medical provider fraud
This type of fraud is committed by employees or medical providers by billing employers for more than the treatment given, and even billing for workers that don’t exist.
Making a claim for a non-work related injury, working somewhere else while receiving workers’ compensation, or not returning to work immediately after they are healed are all forms of employee fraud.
Catching fraud cases is not an easy task. For this reason, claims departments view certain situations with suspicion and past experience has shown that they carry a higher likelihood of fraud: