Work Comp Fraud 101

February 25, 2019 • Missouri Employers Mutual

Fraud can find its way in to any business and workers compensation claim. Although the types of fraud may vary, each one can damage either your business, bottom line, career or work comp rates. Missouri Employer Mutual’s Special Investigations Unit breaks down the most common types of workers compensation fraud and what the consequences are.

Employee Fraud

This type of fraud occurs when an employee knowingly makes a claim for workers compensation benefits that they know they are not entitled to. A good example of employee fraud is when an employee knowingly presents multiple claims for the same injury. Employee fraud is a class D felony and is punishable by a fine of up to $10,000 or double the value of the fraud, whichever is greater. A subsequent violation is a class C felony.

Employer Fraud

Employer fraud can happen in a number of ways. When an employer intentionally misrepresents an employee’s job classification to obtain insurance at less than the appropriate rate, it is a class A misdemeanor and a subsequent violation is a class D felony. Employer fraud also occurs when an employer knowingly make a false or fraudulent statement regarding an employee’s entitlement to workers compensation benefits to discourage the employee from making a legitimate claim or when the employer makes a false or fraudulent material statement or material representation with the intent to deny benefits to an injured employee. These are considered class A misdemeanors punishable by a fine of up to $10,000. A subsequent violation is a class C felony.

Insurer Fraud

Employers aren’t the only ones capable of fraud, insurance companies can play a part as well. Insurer fraud occurs when an insurance carrier or self-insurer knowingly and intentionally refuses to comply with workers compensation obligations to an entitled employee. Insurer fraud is a class D felony, punishable by a fine of up to $10,000 or double the value of the fraud, whichever is greater. A subsequent violation is a class C felony.

Suspect fraud?

If you believe you have accurate information with regard to someone not complying with workers compensation laws, or know someone who may have committed fraud, please report it. Missouri Employers Mutual’s SIU is designed to work specifically with suspected fraud. MEM policyholders should call the Fraud Hotline at 1.800.442.0592 to report suspected fraud, calls to the hotline can be made anonymously. If the investigation reveals a violation of a fraud statute, MEM will send a referral to the state’s Fraud and Noncompliance Unit. If fraud is discovered the case will be referred to the Missouri Attorney General for prosecution. All fines or penalties levied and received as a result of prosecution are paid to the Missouri Workers Compensation Fund.

For more information on ways to prevent workers compensation fraud check out our free resources.

February 25, 2019
Missouri Employers Mutual
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