Workers? comp fraud can have costly consequences

When employers fail to provide workers' compensation insurance for their workers, it can result in real financial hardship for injured employees. The medical expenses incurred as a result of a workplace injury sometimes can even lead to bankruptcy.

To help protect workers from such situations, the state of Missouri requires employers with five or more employees to provide workers' compensation insurance coverage for their employees.

Employers in the construction industry are required to provide workers' compensation insurance coverage if they have one or more employees. Construc-tion can consist of many trades, such as roofing, siding, painting, brickwork, masonry, demolition, excavating, carpentry, new home construction, remodeling, installing carpet, wiring, plumbing, electrical installation, erecting outbuildings and more.

Class A misdemeanor

Any employer failing to insure liability in accordance with the law is guilty of a Class A misdemeanor. The penalty for this can be twice the annual premium the employer would have paid or $25,000, whichever is greater.

The Fraud and Noncompliance Unit investigates allegations of fraud and noncompliance with Missouri workers' compensation law. Fraud in the workers' compensation system can occur at any level, involving employees, employers, insurance carriers, attorneys, physicians and others who try to obtain or deny workers' comp benefits in a fraudulent manner.

Since January 2000, the Missouri Attorney General's Office has fined 31 employers a total of more than $49,000 for failing to provide workers' compensation coverage for their employees.

In Jasper County an employer was found to be required to have workers' compensation coverage, but had failed to do so. The Fraud and Noncompliance Unit referred the case to the Missouri Attorney General's Office for prosecution. Although the suspect agreed to pay a fine of $480, he only paid $132 towards the fine and then stopped making payments. The Attorney General's Office then took the suspect back to court. He pled guilty and received 30 days confinement (suspended). He was ordered to serve 48 hours of "shock time," and was fined $25,000, of which all but $2,400 was suspended. The suspect will have to pay $100 per month for 24 months all for failing to pay $348.

A St. Louis city supermarket failed to carry workers' compensation insurance and had an uninsured worker injury. The St. Louis City prosecutor's office filed charges, and the suspect pled guilty of noncompliance with Missouri workers' compensation law. He received a suspended sentence, was placed on 2 years of probation and received a $25,000 fine, which was suspended.

Misreported income

In Livingston County, a plastering contractor delinquent on his workers' compensation premiums was misreporting his payroll to the insurance company. This enabled him to receive workers' compensation insurance at less than the proper rate. He was interviewed in a correctional facility where he refused to answer questions. The suspect was found guilty of workers' compensation fraud and was ordered to pay restitution to the insurance provider, in the amount of $575. In addition, he received two years of confinement (suspended) and one year of probation.

In St. Clair County a construction company had an injury to one of its employees. When he filed for workers' compensation benefits he discovered the employer was not insured. An investigation proved the employer was required to carry workers' compensation. The case was forwarded to the Missouri Attorney General's office for prosecution. As a result, the suspect pled guilty and was fined $6,000.

Employees can also be found guilty of workers' compensation fraud. A Jackson County employee at a nursing home alleged that while moving a patient, the bed rolled over her foot, causing injury. Prior to reporting the injury to her employer, she had told co-workers that she injured her foot when she dropped a box on it at home. After completing a fraud investigation, it was determined the claim was false. The state Attorney General's Office filed charges and the suspect pled guilty to workers' compensation fraud charges. She received a suspended jail sentence and was placed on two years' probation.

Greene County case

In Greene County, an employee at a fast-food restaurant was allegedly injured at work. She went for medical care and received written instructions from her doctor. She altered the instructions and presented them to her employer. She was found guilty of workers' compensation fraud and was ordered to pay $191.50 in fines.

For more information about Missouri workers' compensation laws, please call the Fraud and Noncompliance Unit at 800-592-6003 or write them at PO Box 1009, Jefferson City, MO 65102-1009.

(Dennis Moore is the chief administrator of the Missouri Division of Workers' Compensation's Fraud and Noncompliance Unit.)