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FUBA: Florida United Business Association

Fraud: Workers' Comp


Fraud is one reason workers’ compensation costs in Florida are so high.  Stopping fraud will help to stabilize costs and would benefit the entire system.  You can help by understanding the serious consequences of workers’ compensation fraud and by knowing how to report it. 

The two more common types of workers’ comp fraud schemes are claimant fraud and premium fraud. 

Claimant Fraud: In claimant fraud, an employee may receive workers’ comp benefits under false pretenses.  The dishonest claimant may lie about the injury occurring on the job, when the injury actually occurred at home or elsewhere.  Or, the claimant may lie about the injury itself.  He or she may overstate the extent and seriousness of the injury or receive money from other sources while lying to the insurance company about such income.  Unscrupulous medical providers (doctors, pharmacists, etc.) can try to be paid for excessive or even nonexistent treatments, and attorneys can become involved in scams by trying to secure benefits the claimant is not entitled to.

Premium Fraud: Premium fraud occurs when employers use a variety of schemes to defraud their workers’ compensation insurance company by either (1) not paying for workers’ comp coverage at all, or (2) by paying less than they should.  The primary scams are:

  • Reporting to the insurance company a payroll figure than is less than the total payroll actually being paid to employees of the business
  • Misclassifying workers by not revealing all job duties that an employee performs
  • Paying workers in cash while identifying them as subcontractors
  • Paying/using illegal aliens as employees
  • Failing to report on-the-job injuries to the insurance company
  • Failing to have workers’ comp insurance when it is required

If your business is engaging in premium fraud, you will be subject to various penalties: 

  • If you are lying to your insurance carrier, you will lose your workers’ comp insurance and it will be difficult to secure another policy.  In addition, your insurance company can pursue civil charges against you.
  • You can also be charged criminally as outlined below.  
  • If you are discovered working without the appropriate workers’ comp coverage, the State will shut your business down until you have secured the appropriate coverage and paid the appropriate penalty.

Workers’ comp fraud is a serious offense.  The Florida Legislature has enhanced the penalties for workers’ compensation fraud to more closely mirror the penalties for theft in Florida.  In the past, workers’ comp fraud was a third degree felony.  Now a person can be charged with a first-degree felony, depending on the amount of money stolen.  In addition, the statute of limitations has been increased from 3 years to 5 years after discovery of the crime. 

Workers’ comp fraud is also a drain on Florida’s economy.  It causes insurance companies to become insolvent and go out of business, it puts legitimate employers out of business, and it increases health care costs and the cost of insurance for all Floridians. 

If you suspect insurance fraud, immediately report it to the Florida Department of Financial Services’ Division of Insurance Fraud.  They provide a toll-free hotline for reporting suspected workers’ compensation fraud. 

The hotline number is 1-800-378-0445.  Or, you can report fraud to any of the field offices listed below:
Fort Myers:  239-461-4002
Jacksonville:  904-348-2604
Miami:  305-536-0302
Orlando:  407-835-4402
Pensacola:  850-595-6394
Plantation:  954-321-2902
St. Petersburg:  727-563-1142
Tampa:  813-890-1902
West Palm Beach:  561-242-5442

Published: 06/15/2005

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Apr 27, 2017

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