Top Three Employer Fraud Schemes in South Carolina Workers’ Compensation Cases
Oct. 22, 2019
In the workers’ compensation realm, worker fraud stories are always making the headlines. For example, some people are still talking about a notable 2009 incident. A postal worker was receiving workers’ compensation benefits because she said she got hurt at work and could not stoop or bend. While receiving benefits, she appeared on The Price is Right, where she spun the “big wheel” twice.
But statistically, employer fraud is a much bigger problem than worker fraud. Most employer fraud scams, including the ones listed below, help employers illegally pay lower premiums. So, there is less money in the system, which means injured workers have a harder time obtaining the compensation they deserve.
This issue underscores the need for an aggressive Greenwood workers’ compensation attorney who will fight for your rights against the big workers’ compensation insurance companies.
Often, companies promise to pay injured workers’ medical bills in cash if they agree to not file claims. Such a promise may be very tempting. But in the long run, both the injured worker and other workers lose big time.
Almost inevitably, employers renege on these promises. When they do so, the deadline to file a workers’ compensation claim has usually passed, particularly if the victim sustained a trauma injury after a fall or other such incident.
Moreover, the medical provider usually demands payment in these situations. When injured victims partner with us as attorneys, we usually will send a letter of protection to the medical provider, who agrees to defer billing until the claim is resolved.
Other workers lose as well. Since the employer does not have a claim on its record, its insurance premiums are lower. Therefore, as mentioned, there is less money to go around. So, workers’ compensation attorneys must fight extra hard to get victims a fair-sized piece of a shrinking financial pie.
Typically, workers’ compensation insurance companies calculate premiums based not only on risk, which includes the number of prior claims, but also the number of employees. The more workers a company has, the more it pays.
So, many employers classify their workers as “independent contractors” or even “owners” in order to reduce the number of workers and thus reduce their premium payments.
Other employers put high-risk workers into low-risk categories. For example, a construction firm might have a dozen construction workers and two office workers. To reduce its premium payment, the firm may claim it has a dozen office workers and two construction workers.
Insurance Policy Rental
This scam is a bit more complex, and since it could result in substantial illegal savings, very common as well.
A fraudster provides false information to a workers’ compensation insurance company and buys a policy for a non-existent company. The fraudster then sells the policy number to uninsured employers so they can claim they have coverage.
Like most other fraud schemes, this one usually collapses eventually. But even if companies get caught, they know the penalties may be light. Generally, the fine barely exceeds the money the company saved by participating in the illegal scheme. So, they think they have nothing to lose.
Connect with Tenacious Attorneys
Workers’ compensation employer fraud scheme cost injured victims millions of dollars. For a free consultation with an experienced workers’ compensation lawyer in South Carolina, contact Powers Law now. As a nurse and an attorney, we have the legal skill and medical knowledge to help you with your case. Home and hospital visits are available. Call for a free consultation now.