Unfortunately, many people think that workers are the ones who usually commit workers’ compensation fraud. Some outlets spread stories about fake injuries or exaggerated claims that lead to higher costs for businesses and insurance companies.
In reality, employers and other parties are more likely to commit workers’ compensation fraud than workers. Understanding this side of the issue is a key factor in protecting employees and the integrity of the workers’ compensation system.
How employers commit workers’ compensation fraud
Employers may commit workers’ comp fraud to manipulate the system for financial gain. One common method is underreporting payroll. A business owner might report fewer employees or lower wages than they actually pay.
By doing this, they can avoid spending millions on insurance premiums, but it cheats the system and puts workers at risk. If an injury occurs, the injured workers may not receive the benefits they deserve because the employer underreported wages.
Another way employers commit fraud is by misclassifying employees. For example, an employer might classify a worker in a less risky job category to lower their insurance premiums. If the worker gets injured, that individual might not receive the correct compensation because of a job misclassification.
Other parties in workers’ compensation fraud
It’s not just employers who can commit workers’ compensation fraud. Medical providers or insurance adjusters can also take part in this misconduct.
Some medical providers might bill for services they didn’t actually perform or inflate the cost of treatment. Also, insurance adjusters might deny legitimate claims or manipulate the process to benefit themselves or their company. In either case, workers may need to protect themselves from the consequences of these schemes.
No matter who is responsible, workers’ compensation fraud ultimately harms the people the system should be helping. As a result, injured workers who are going through the workers’ comp process may have to take extra care to ensure they receive the coverage they deserve.