Nevada’s workers’ compensation laws do a great job of protecting employees if they become sick or injured within the scope of their employment. However, it is not uncommon for employees to manipulate the system, thereby perpetrating workers’ compensation fraud. In fact, according to the National Insurance Crime Bureau, workers’ compensation fraud accounts for $7.2 billion per year, or approximately 25% of all insurance fraud. To protect themselves, employers need to be on the lookout.
While not self-determinative, an employer can look at certain actions on the part of the injured or ill employee to help determine if fraud is being committed.
For example, if an employee is disgruntled or soon to retire, it is possible they may look to cash out by making a hefty workers’ compensation claim.
If an employee took excessive time off prior to the injury, it could indicate that they secured other employment to enhance their income once their workers’ compensation claim is filed. This can also be the case if the employee takes more time off than seemingly needed for the type of injury sustained.
The timing of the claim can be indicative. An employer should be leery if a claim is made after an employee is fired or laid off or when an employee begins.
If the employee is extremely familiar with the workers’ compensation procedures, it could be an indication that they have used the system in the past and lead to a possible conclusion that they are familiar in manipulating the system.
An injured employee who refuses to attend doctor’s appointments or rehabilitation consultations is also a sign that the employee is interested in collecting a check rather than actually getting back to the workplace.
The reason behind employee’s risking hefty fines and jail time to perpetrate workers’ compensation fraud it hard to figure out. A survey conducted by the Insurance Research Council found that 34% of employee’s surveyed felt it is “almost always acceptable” to remain out of work, collecting benefits, if there was still some lingering pain from their injury even if a doctor authorized their return to work. Further, 35% of those surveyed felt it was acceptable to “pad” an insurance claim.
To help combat this attitude, it is important for employers to implement a zero-tolerance policy for fraud. The plan may include working with insurers and law enforcement with the purpose of pursuing civil and criminal liability for those found to be executing a fraud scheme. Educating employees on workers’ compensation, how the program works, and the potential impact of manipulating the system can also go a long way in preventing workers’ compensation fraud as injured employees who do not understand the system are more likely to commit fraud.
The company’s position on workers’ compensation’ should be communicated when a new employee is hired as well as on an annual or semi-annual basis to all existing employees. Following the warning signs and instituting the proper procedures should promote a fraud-free workplace and promote trust between employers, employees, and insurers alike.