Workers' compensation is a no-fault system that benefits both employees and employers. However, workers’ compensation fraud occurs when someone willfully makes a false statement or conceals information in order to receive workers’ compensation benefits or prevents someone from receiving benefits to which they might be entitled. Premium fraud can occur when someone makes a false statement in order to obtain or continue a workers’ compensation policy at less than the proper cost.
Workers' compensation fraud costs the insurance industry millions of dollars per year, yet many people consider it a victimless crime. Fraud not only affects a specific employer or business, but also drives up workers’ compensation insurance costs and impacts California’s overall economy. Plain and simple, workers’ comp fraud hurts everyone.
State Fund has earned a reputation as an industry leader in combating fraud. The core of our vigorous and effective anti-fraud program is the Special Investigations Unit (SIU) made up of fraud investigators and investigative liaisons in each State Fund district office.
Fighting fraud is a team effort here at State Fund. Every employee of State Fund is required to take fraud awareness training within 90 days of being hired, and subsequently receives fraud awareness training on an annual basis.
State Fund’s claims adjusters, underwriters, and auditors maintain an especially strong working relationship with the SIU. Employees participate in quarterly fraud trend meetings held in each office throughout the state. These current fraud trends are posted on the SIU website in order to help front line staff better spot fraud and report their suspicions to our SIU.
The SIU and State Fund’s Special Litigation Unit work together with law enforcement officials at local, state, and federal levels. This joint effort has resulted in arrests and convictions for all types of workers’ compensation fraud. In 2008, State Fund’s efforts in identifying and reporting suspected fraud, as well as in providing assistance to law enforcement, resulted in more than $15 million in restitution ordered.
State Fund provides a variety of resources on how to prevent, detect, and report fraud. SIU established the Fraud Hotline (1-888-STOP FRAUD) as a way for employers, workers, providers and vendors to report suspected fraudulent activity. SIU investigators review all tips, and report suspected fraud to the California Department of Insurance and local district attorneys offices. We also produce videos, posters, brochures, and other educational materials as tools for fighting fraud, including:
Together, we can make a difference to stop workers’ compensation fraud.
