When a worker gets hurt on the job, they trust their employer to provide worker’s compensation insurance to help cover medical bills and wages lost. California law requires employers to offer this benefit.
As of May 2020, California workers filed over 13,000 worker’s compensation claims totaling over $600,000 paid in compensation and medical bills. Nationally, employees benefit from $60 billion in total coverage. Among all these claims, how many are false?
False claims by the numbers
According to the National Insurance Crime Bureau (NICB), insurance fraud costs $30 billion every year. Worker’s compensation claims take up a smaller portion of that but end up costing approximately $7 billion every year. The five most common types of claimant fraud are:
- Claims for injuries sustained outside of work. Most false claims stem from employees getting injured elsewhere and looking for medical coverage.
- Exaggerated claims. Employees who wish to remain at home but have their paycheck covered by worker’s comp insurance will exaggerate the pain or damage to secure more time.
- False injury claims. Many fraudulent claims are for made-up injuries.
- Claims for old injuries before employment. Some frauds claim chronic or past injuries as current to secure coverage for their consistent medical bills.
- Similar to exaggerated claims, malingerers minimize recovery efforts to gain more paid time off.
Across the board, fraudulent claims have declined over recent years, accounting for only 3% of all worker’s compensation claims. California law even requires the Department of Insurance to post information about those convicted of worker’s comp insurance fraud for five years.
How to spot a fraudulent claim
Employers might have difficulty spotting a false claim. The following signs may indicate an employee is attempting fraud:
- Co-workers gossip about the injury.
- Clear details of the incident are difficult to identify.
- The injured party is refusing specific medical exams, like an x-ray.
- No one witnessed the incident.
- The employee reports the claim on a Monday.
- The employee files a report more than seven days after the injury.
Bear in mind that fraudulent claims are rare. Any employers or employees with questions about a worker’s compensation claim, denial or appeal can reach out to a local attorney familiar with employment law and insurance for more information.