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Most work comp claims involve legitimate accidents and injuries, but the few that are fraudulent can impact everyone. The most common type of work comp fraud is employee claim fraud, which occurs when an employee makes a claim for benefits that they know they are not entitled to. Work comp claim fraud is easier to spot when you know the red flags to look for.
In fraud cases, an employee may:
- Claim to have been injured at work when it actually happened elsewhere
- File multiple claims for the same injury
- Exaggerate the seriousness of an injury
- Stage an accident that never happened
There are many ways a claim can be fraudulent, but these common red flags indicate that a claim is worth a closer look.
Suspicious timing
Did the injury occur on Monday morning or Friday afternoon? Did the employee file the claim late or after termination of employment? Is there a coincidence between the date of injury and a request for time off? Is the employee difficult to reach at home after the injury?
Suspicious circumstances
Did anyone see the accident happen? Does the employee’s version of what caused the injury conflict with medical reports or the first report of injury?
Employee history
Is the employee new or disgruntled? Do they have a secondary job? Is there a history of disciplinary action or other litigated claims? Has the employee tried to borrow money from coworkers or requested pay advances?
Injury characteristics
Is the work injury similar to a pre-existing medical condition? Does the employee have hobbies that could cause a similar injury? Do they refuse medical treatment that may confirm the nature or extent of the injury?
The presence of any of these warning signs does not prove fraud, but should encourage you to dig deeper by asking more questions. Because employer fraud is also a concern, employers must remain diligent about all work comp claims filed by employees. You may be at risk for employer fraud if you make a false statement about an employee’s entitlement to benefits or support a questionable claim. Never discourage an employee from filing a legitimate claim, and always determine whether the reported injury happened prior to being insured.
Depending on the extent of the crime, claim fraud can be a misdemeanor or a felony. Multiple offenses can be punishable by fines up to $10,000 or double the value of the fraud, whichever is greater.
If the details of an employee’s claim just don’t add up, contact your work comp provider’s fraud unit and let a trained investigator help protect you and your business.