The most common ways an individual commits insurance fraud is if he or she:

  • fakes an injury at work to get paid time off
  • exaggerates the severity of a legitimate injury to get additional time off work
    with benefits
  • claims an injury occurred on the job when it actually took place elsewhere
  • takes a new job and lies to the insurance company about being unable to return to work at the previous place of employment‚ or lies by concealing his/her income from another job

An employer can commit insurance fraud if he or she:

  • understates the amount of company payroll to reduce premium payments
  • claims employees are independent contractors
  • lies about the type of work employees do in order to qualify for and pay
    lower premiums
  • fails to carry workers’ compensation insurance

Examples

Here are a few typical scenarios to illustrate some of the different ways workers’ comp insurance fraud can be committed:

Phyllis injured her back while renovating her home’s bathroom, but she claimed a slip and fall at work caused the problem so she could claim workers’ compensation benefits and receive payment of her medical bills and lost wages.
Tony owned a profitable roofing company. To save money, he told his workers’ compensation insurance company that a number of his staff were clerical workers, a much lower risk and therefore eligible for a lower premium.
Donna operated a restaurant and bar but didn’t purchase workers’ compensation insurance. After an employee was injured in a fight between bar patrons, there was no workers’ compensation insurance to pay the several thousand dollars in medical treatment needed by the employee.
Steve was injured at work and his employer’s workers’ compensation insurance covered his medical bills and lost wages for the time he was unable to work. While still receiving disability payments, Steve went to work for another company. He concealed his new job from his old employer. He reported he was still disabled and signed a statement to that effect to his old employer’s workers’ compensation insurance company.

To view a TV spot from the prevention campaign that addresses the issue of workers' comp insurance fraud, click here.

To download a brochure from the prevention campaign that explains the issue of workers' comp insurance fraud, click here.

Consequences

Workers’ compensation insurance provides a “safety net” for workers injured on the job‚ and this is why workers’ comp insurance fraud is such a serious crime. As with all other types of insurance fraud‚ Pennsylvania considers it a felony. Violators can spend up to seven years in prison and spend up to $15‚000 in fines. There are also many other associated expenses such as court costs and legal fees. Plus‚ those found guilty of insurance fraud have the stigmas and limitations of being a convicted felon to carry with them for life.