I would like to discuss a current issue that has become a more apparent and quite frustrating when representing petitioners in workers compensation claims. It seems that smaller employers with employees of 50 and less have been among the worst when trying to redirect employees from their rights to receive workers compensation benefits. On several occasions, my office has been called by owners of companies trying to deny an injured worker was an employee. This usually happens when a worker gets paid by cash. We also see employers intimidate an employees and threaten their jobs. This issue has been addressed by the state legislator.
Employer Fraud
Employer fraud in total throughout the country is much more extensive than employee fraud. The wider the net, the more the fraud. When thousands of employers across the country intentionally fail to pay required workers’ compensation premiums or misrepresent the job classification of employees who are covered, the fraud perpetrated on the system vastly exceeds the dollar amount of employee fraud.
Employer/insurance fraud comes in many varieties:
- The employer intentionally refuses to purchase insurance for its employees, thus forcing the taxpayer to pick up significant medical bills through Medicare or Medicaid;
- Misclassifies its work force and the nature of the work being done by its employees in order to obtain reduced premiums;
- Denies valid claims, hoping the employee will not pursue the matter;
- Issues late disability checks;
- Refuses to pay for needed medical attention and prescription drugs;
- Allows healthcare insurance policies to pick up costs it should be paying (they sometimes even reimburse the employee for co-pay on the health insurance policy);
- Gives managers and adjusters incentives to either deny claims or to offer unreasonable settlement amounts; engages in bid rigging on insurance contracts;
- Provides “ghost policies” to independent contractors who are really employees;
- Incorrectly calculates the average weekly wage;
- Refers injured workers to unscrupulous heath care professionals who deny care;
- Classifies employees as independent contractors in an attempt to evade paying premiums;
- Lays off the employee once a claim is filed, to send a message to other employees; or
- Videotapes a job that has been dramatically altered to deceive a physician or administrative law judge.
Conclusion
The law of unintended consequences may be catching up with insurance companies, employers, All states are encouraged to adopt an aggressive policy toward uninsured employers and others who try to cheat.
Effective systems need to be in place to guarantee that required policies are purchased, that annual audits of employers are conducted, and that fraud investigators are authorized to shut down construction sites and other places of employment when the employer has not purchased insurance.