New study shows 13% of small business owners worry about workers’ comp fraud and how public perception fuels this fear.
A recent telephone survey conducted by Employers Holding, Inc. found 13% of small business owners are concerned about workers’ comp fraud. It also found that 21% of small business owners feel unprepared or unsure of their ability to identify workers’ comp fraud.
We find this survey fascinating but hard to take seriously. Accident Fund, one of the nation’s largest workers’ comp insurance carriers, estimates that fraud occurs in just 4% of claims. A 2014 study of the top workers’ comp fraud cases showed employee fraud to be just $450,000 while non-employee fraud cost a staggering $74,876,000.
I would also bet 100% of small business owners worry about the cost of insurance. Be sure to check out our blog post on how small business owners should demand a refund from their insurance companies based upon a 28% drop in Michigan’s pure premium rate.
Insurance companies and corporate interests have spent millions on propaganda to influence the public. Half-truths and misconceptions fuel reform efforts across the country. A survey by Harris Poll found that 37% of Americans believe “most workers’ compensation claims are made by people who don’t want to work.”
A much bigger problem that does not get enough attention is employee misclassification. This is when employees are purposely categorized as independent contractors to avoid workers’ comp law. Taxpayers must pick up the slack through government programs like Medicaid and Medicare.
Premium fraud is another serious issue. This is when a business deliberately misrepresents the number of its employees and the nature of work performed. Business owners who play by the rules end up paying higher insurance premiums and suffer with a competitive disadvantage.
We hope this information gives you something to think about next time someone complains about employees committing workers’ comp fraud.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (855) 221-2667 for a free consultation today.