When an employer commits workers’ compensation fraud, not only does the insurance company get hurt, all the honest employers get hurt too, as they have to pick up a disproportionate share of the insurer’s cost of operations. If you become aware of a competitor or another employer committing workers’ compensation fraud, you should report the matter to the appropriate governmental agency.
Workers Comp Fraud is Considered Theft
Fraud is a form of theft, therefore when an employer commits any of the following actions; the employer is intentionally stealing from the insurance company, and is committing fraud.
Misclassification of the Business
The business classification code used by the insurer to rate the employer in comparison to other employers in the same industry will be wrong if the nature of the employer’s business is not properly disclosed to the insurance company. For example the employer advises the broker attempting to write their business that the company does janitorial services, but does not disclose their primary work is skyscraper window washing.
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Misclassification of Employees
The employer classifies employees as a type of employee other than what the employee actually is. For example: the employer classifies employees as corporate officers (for whom they don’t have to purchase workers’ compensation insurance) when the employees perform the regular work of the business and exercise no control over the management operation of the business.
Under Reporting the Actual Payroll
Another factor in the calculation of workers’ compensation premiums is the total amount of payroll. Dishonest employers will report fewer employees and a lower total payroll then they actually have. Reporting a payroll that is 25% below what the actual payroll is will normally result in the workers’ compensation premium being 25% lower than it would otherwise be.
Cash Economy
Closely related to under reporting the actual payroll is the employer who utilizes a cash economy to lower workers’ compensation premiums. These type of shady employers will:
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- Advise workers they are not employees, but independent contractors, and will provide them a 1099 form instead of the standard W-2, while all the time supervising and directing the employee’s work.
- Pay workers a minimum amount by check, reportable to the government and insurer, and pay the employee an additional amount in cash.
- Employers often sell employees on the idea of lower taxes to get them to agree to this ploy.
- Pay workers with compensation other than a check or cash, by providing free rent or meals, barter, etc.
Blocking the Reporting of Claims
Employers normally understand the more claims they have, the higher their workers’ compensation premiums will be. The dishonest employer will often voluntarily pay the employee’s medical treatment when they anticipate the injury will be a medical only claim.
Sometimes employers don’t cheat the workers’ compensation insurer, but instead commit workers’ compensation fraud against other employers. This occurs when an employer does not purchase workers’ compensation insurance at all. While this type of employer may get away with for a while paying the medical and wages of injured employees, sooner or later a severe injury occurs that the employer cannot afford to pay for. The injured employee’s work comp claim eventually will end up in the state funded pool for uninsured injuries. Of course the state pool is funded by assessments against the insurance companies, and the insurance companies pass the cost along to the legitimate employers insured with them.
Consequences of Employer Fraud
Reputable employers do not consider committing workers’ compensation fraud. Hopefully, employers are honest because it is the right thing to do. If any employer thinks they can get away with workers’ compensation fraud, they should remember that when they are caught (and they almost always are) they will have to deal with:
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- Criminal record
- Jail time
- Fines
- Payment of underpaid premiums
- Loss of business license
- Loss of income from being out of business
If you know of an employer who is committing workers’ compensation fraud, the information you have should be provided to the governmental agency that deals with insurance fraud in your state.
Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: [email protected].
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.
In my case, my employer tried to deprive me of workers compensation benefits by having the HR Mgr. inform the insurance carrier that I was not hurt at work. Subsequent to that, I had to get an attorney after being maimed by a physical therapist that was a part of the insurance carriers network of medical providers. Thinking that I was protected now that I had an attorney, I was sent to a series of 3 lumbar epidurals. I was awake for the first one and was injected not only in the lumbar but also in the middle of the back. The anesthesiologist told me herseelf that the shots in the middle of my back were the pain blocker. I received 4 to 6 small shots in the middle of my back and one larger shot to the right of the middle of my back, then the lumbar ESI which I didn’t feel at all.
The 2nd ESI took place 2 months later. I was denied my request to stay awake. I was told by a women who I later learned may not have worked there at all but may have been a friend of the President of the company’s wife where I once worked and was injured. She adamantly told me that I had to be under general anesthesia, that it was the policy of the surgery center. When I awakened from that, I was in serious pain in my neck. It felt like someone hit me in the neck with a 2 by 4. I immediately informed those around me. I also felt a tingling popping sensation from injections in my neck, down the left side of my spine and down my entire left leg. I thought they they dropped me while I was asleep and tried to cover up the damage to my body by injecting me with something. I now believe that those injections were to cause harm to my soft tissue in my neck down to my toes.
The third Lumbar ESI took place at another surgery center – Coastline Surgery Center in Santa Ana, CA. I had arranged in advance via phone that I would not have to be under anesthesia. Long story short, my ortho surgeon showed up and then left as did the pre-op nurse. When she returned, she had in her hands the intravenous device and I immediately re-affirmed with her, I AM NOT GOING UNDER ANESTHESIA. She said that she had to put it on me. She looked upset and was clearly in physical distress. She placed the intravenous apparatus on me and then I was wheeled into the OR, I crawled from the gurney to the table, on my stomach, face down, I said to everyone there, I am not going under anesthesia, but I was told that the anesthesiologist would give me a little to keep me calm. I felt nothing which was strange because I did feel a buzz when I was at the first lumbar ESI in Los Angeles, CA from the anesthesia. I then felt the Doctor shove the needle into my left lower lumbar without any pain blocker (as I was expecting the same shots that I received at the first lumbar ESI procedure). I began screaming loudly STOP or WAIT!!!! My head flew up and then I placed it back down on the table. The Doctor then moved the needle to the nerve on the left side of my spine and held it there.. I bit down into the towel that was there for my head and scream muffled screams into the towel. I looked up at the anestesiologist, Dr. Atef Rafla – owner of the surgery center, and he had NO EXPRESSION on his face. My ortho surgeon would not relent. I thought for a fraction of a second, SOMETHING IS WRONG, PULL THE INTRA-VENOUS OUT! Then I thought to myself, No, it’s OK..you are in a surgery center and the Dr. just wants you to be under anesthesia. So, I spit out the towel and said, OK… put me under anestesia! I was in agony! It was torture. The Doctor still held the needle against the nerve in my back under I was asleep. I awakened 1 hr and 40 minutes later. I thought to myself, Oh my God, they didn’t. I was maimed from my skull down to my tailbone. I had injections throughout my back, spinal column, shoulders, etc that had that tingle popping sensation – it felt like Alka Selzter under my skin. I could feel that some of my muscles were pulled up off my back. In particular, the middle right muscle that abutts to the spinal column had been pulled away and off my back – and was hanging down to the right side of my back. I was in shock and thought, who do I tell. I was in the Lions Den. The women that was attending me as I awakened was the ortho surgeon’s office assistant. To my knowledge, she had no business in a surgery center. I had complained about her the previous year – she was rude on the phone. I asked her, what time it was – even though there was a clock on the wall. It appeared that I had been in the OR for 40 minutes but I learned when I got into the car that I had been asleep for over an 1. 5 hours. That happened in June 2013. I had been given some sort of drugs that kept me from calming down. I was followed everywhere including hospitals where I asked for help with the pain that was now all over my back, shoulders, neck, buttocks, etc. I was treated with disbelief when I told the ER Doctors what happened. My back felt like it was on fire underneath. By August 2013, I would lay prone on my bed to tried to get some relief from the fire in my back and I could feel that my muscles were so burned underneath the skin that they felt like there were rivers of broken open dried muscles that were bleeding. I could feel my ligaments, dried from the criminal injections of some sort of drying agent – maybe ethanol, literally breaking like think cookie wafers all up my back. I am now permanently disabled and in chronic pain. My spinal column has very little stability because the ligaments are gone. The muscles, tendons and other soft tissue were also burned by the injections. This is not the tip of the iceburg. But, what has happened to me is a heinous crime. Since that last epidural, I have been the target of a plethora of more crimes including intrusions into my home, the theft of some of my workers comp documents and medical history, tainting of my food and drink, protein powder, vandalism of my car, my phone tapped, e-mails hacked, and likely video and audio in my home. The Judge at the Anaheim WCAB also facilitated corrupt actions during the trial. By then, I had found that my own attorneys had lied to me in several instances. They attempted to protect the insurance carrier and the ortho surgeon.
I have no faith in our government, judicial system, elected officials etc. I have come to realize that the State of CA seems to be protecting those who committed these crimes against me including my former employer who I filed a complaint about.
I am still to this day – 12/28/15 under attack from the defense in my WC claim. My home is SKUNKED via some sort of technology, on a daily basis. Few days or nights go by were my home is not attacked with mal-odorants either throughout the apartment or in specific rooms. There is MUCH more. I found a letter given to me by my then WC attorney that was written by the defense attorney. It is an attempt to get my attorney to settle for $7,500.00 and as an inducement, the defense attorney – Charles Bentley, writes that it looks like the treatment is harming the applicant rather than benefiting her. That letter was written before I was maimed at all 3 lumbar ESI procedures. It was written on August 2012, just after the deposition.
I have no doubt that the defense in my workers comp claim including my employer, their law firm and the insurance carrier are behind what I have come to learn is a campaign of crimes referred to as “organized gang stalking”. I’ve met other injured workers on line who indicated that they are under similar attacks and they call themselves “targeted individuals”. These crimes are meant to put the target in a negative light. They are also meant to destroy the target in any way including professionally, financially, physically, etc. The defense for those who are accused of these crimes, will pain the targeted individual at a liar or mentally ill. That seems to be the MO.
I’ve been informed by injured worker advocates that these crimes have been in existence for decades. One needs to ask, “Then why aren’t injured workers warned of them!?” Why wasn’t I warned? Why is there no formal disclosure to injured workers that they could have their body maimed into permanent disability? The law office that represented me told me that they warn all of their clients / injured workers of these sort of crimes. They told me that they didn’t know how it slipped through the cracks on my file. I find that odd too since when I had signed with them, I had informed them that I had already been maimed by the physical therapist.
I have gone to other attorneys, many of them, workers comp, litigation, employment, civil, etc. No one will take my case. I called the National Center for Victims of Crimes. I described to them what had happened and what was still happening. They told me that I was a victim of “gang stalking”. I learned through others that “organized gang stalking” is most prevalent in the State of CA and is utilized by insurance carriers, law firms, city, county, state and federal government, law enforcement, FBI, etc. So how do we stop these crimes? I’ve called the FBI, law enforcement, Assemblymen, Senators, Congresspersons, Governor Jerry Brown, the Director of the CA Dept. of Industrial Relations, the WCAB, media etc. The responses vary but in some cases, the responses are less than cordial, and none are helpful. Most are, “Im’ sorry, we can’t help you.” In some cases, for example, in Lake Forest, CA one police officer was questioning my metal stability. Yet, in other cities where I have moved to and reported crimes, the police officers know exactly what I am talking about. I recently had my car vandalized again, this time in a different city. I explained to them that I was a targeted individual and the police officer indicated that this may not be from gang stalking. He was knowledgeable about organized stalking crimes.
In my case, my employer did commit WC crimes against me. One the day that I elected to file a WC claim, my employer placed an ad on Craiglist showing my position as “Escrow Manager” open. He fired less than 3 months later after I had endured abuse and being ostracized. I informed the law office that I signed with and they never filed a 132 ??? form. I filed a complaint against my employer with the CA Department of Fair Employment and Housing and they gal handling my file was actually very nice. She felt bad that she had to tell me that there was nothing that they could do for me.
I am convinced and have no doubt that the State of CA has colluded with insurance carriers, employers and law firms against injured workers. Money can buy most elected officials but apparently, it is can also buy their favor when a person is brutally forced under anesthesia and maimed from their skull down to their tailbone!