Is workers’ compensation fraud more prevalent during a down economy?
Yes. Employees are concerned that they may be laid off and may be aware that workers’ compensation benefits are more attractive than unemployment benefits. Plus, there is no time limit on how long benefits can be paid, and there is a possible lump sum payment for partial or permanent disability. What is the cost to the employer? There is a direct cost to the employer plus an indirect cost. Each employer has an experience modification factor that is unique to his business. This is calculated by a national rating organization and is based on an employer’s payroll, expected losses and actual losses. If an employer is hit with several fraudulent claims, the factor will increase and result in significantly higher premiums. The factor can range from a 35 percent credit to a 75 percent debit. An increase in claims will result in a major increase in your premiums for the three years following your next renewal. What are some red flags that might indicate a fraudulent claim? There are several r
