Workers Comp Claims Run the Gamut from Expensive to Notorious

Posted by on October 30, 2013 in Legal Matters for Business [ 0 Comments ]

expensive workers compWorkers compensation was put in place to aid those injured on the job, preventing them from falling into a dire financial situation as they mend. That being said, some individuals try and exploit the system to their benefit, in the meantime raising overall costs for employers and employees alike. As the laws read nationwide (except in Texas), all employers that have at minimum one employee must carry workers comp protection.

The bottom line with workers comp coverage is that when an employee files a claim via a company’s comp policy, the worker’s medical treatment is compensated by the business owner’s insurer. In many cases, the insurer also reimburses the employee for some of the lost compensation due to a work-induced illness or injury that occurred on the job.

For those who may not have followed workers compensation news in recent years, some major workers comp cases have come and gone, giving some employers, employees and the general public pause to shake their heads.

Among the more notable cases have been:

The Cheaters – There are numerous companies, groups and agencies who track workers compensation cases, looking for fraud at each and every turn. According to a report from Risk Management Monitor (provided by Paul Colbert, CEO of Meridian Investigative Group), here are a few examples of individuals who tried to cheat the system: One woman claimed her right foot was so badly injured that she was unable to walk for long periods of time, hence she also could not do her job. This individual only had one problem: she was videotaped moving about without her crutches and also holding an ambulatory boot in her hand. Making things worse, she also tried to hit someone with the boot. Then there was a male worker that filed for workers comp claiming an injury left him with a bad back and injured left ankle. This individual would eventually be videotaped pushing his pickup truck along the road after it stalled, seemingly without much trouble. Finally, another male filed a workers compensation claim, stating he was reportedly blinded as the result of a workplace injury. While this could certainly happen, the claimant’s story didn’t pass the smell test, as he was later videotaped behind the wheel of a golf cart and undertaking maintenance duties.

Related: Financial Implications of a Workplace Injury

Illinois comp awards prove suspicious – Something did not seem right when a number of staff members at an Illinois correctional center received significant workers comp payouts . The Belleville News-Democrat reported earlier in 2012 that a number of staff obtained close to $10 million in comp awards. After the report surfaced, two state arbitrators were placed on administrative leave, one of whom obtained an award of nearly $49K for “delayed onset carpal tunnel syndrome.” Remember, the awards, which range from some $20K to $150K, are footed by the taxpayers when all is said and done.

Who are more expensive? – Some individuals may wonder why a number of workers compensation claims end up being so expensive. According to a study, “Determinants of Escalating Costs in Low Risk Workers’ Compensation Claims,” published in an edition of the Journal of Occupational & Environmental Medicine, which looked at more than 36,000 claims over a 5-year period in Louisiana, claimants were more apt to produce claims with high actual expenses if they were: Male, older than 40, married/separated or divorced, as opposed to single, employed in smaller businesses, and claimants for whom the employer paid a higher premium.

Related: Are Your Workers Healthy?

Crime doesn’t pay – As the Coalition Against Insurance Fraud (CAIF) notes, workers compensation fraud is an on-going and expensive crime nationwide. According to the organization, tens of billions of dollars in false claims and unpaid premiums are stolen on a yearly basis. The crime isn’t always on the employee end, as unlawful business owners sometimes try and cheat the system by paying less in workers compensation premiums than they owe. In some cases, businesses will hide their premium scams behind dummy companies and fake accounting just to name a few. At the time in 2009 when a California couple totaled more than $38 million in premium insurance fraud, they were living quite the lifestyle. Investigators say that among the 106 felony counts filed against the husband and wife was misrepresenting details to a workers comp insurance company. The duo turned in their lavish lifestyle of homes, vacations and more for years behind bars.

As you can see, workers compensation awards, fraud, expenses, etc. come in all different shapes and sizes. Being a small business owner, make sure you are properly covered, knowing that both you and your workers are not cheating the system along the way.

Related: Choosing the Right Insurance for Your Small Business
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