Workers’ Compensation Fraud: What to Look For

Workers’ compensation insurance fraud can be committed by employees, employers, insurers, agents, doctors, lawyers or anyone else involved in the workers’ compensation process. But workers’ comp fraud primarily penalizes employers and their employees.

When someone fakes or exaggerates a job-related injury or illness to collect benefits, it often causes insurance rates to go up, which can leave employers with less money to provide employees with raises, paid vacations and other benefits.

While the majority of workers’ comp claims are filed in good faith, experts agree that a number of them are fraudulent and that employers should be on the lookout for the following warning signs.

Red flags include claimants who:

• Do not complain when their checks are late, or fail to show up to collect their checks.
• Present conflicting medical information.
• Change the frequency of communication with claims adjusters.
• Claim injuries that are not easily detected, such as back and neck injuries or carpal tunnel syndrome and other conditions related to repetitive motion trauma.
• Have prior workers’ compensation claims history.
• Present claims for non-labor intensive injuries.
• Present pain-related injuries but refuse to undergo surgery or physical therapy.
• Present claims related to mental health.
• Are uncooperative and argumentative.
• Present diagnosis changes after or during claims periods.
• Fail to keep scheduled medical examinations.
• Are experiencing financial difficulties.
• Have records of excessive absenteeism prior to filing workers’ compensation claims.
• Move out of state following an accident or use a post office box for a home address.
• Have worked in the same position for a lengthy period of time and have become bored with the job.
• Are never home when called, but return calls later in the day.

Employers should exercise extreme caution before confronting an employee they suspect of fraud. Uncovering a fraudulent claim can result in substantial savings, but a competent investigator and legal counsel should be consulted before any action is taken against an employee. Doing so will help you steer clear of false accusations that could lead to costly litigation.

HBA of Greenville forms Home Builders Contractor Risk Solutions

Your Home Builders Association of Greenville has formed a new company, Home Builders Contractor Risk Solutions, to offer workers' compensation insurance. 

Home Builders Contractors Risk Solutions was established to provide members of the Home Builders Association of Greenville and non-member contractors with a stable and competitive option for workers' compensation insurance.  Commercial and residential contractors, subcontractors, suppliers, and other businesses affiliated with the construction industry also will benefit from participating in the program.

• Founded, owned and operated by the HBA of Greenville
• Worker's compensation insurance at competitive rates
• Coverage in all 50 states keeps your workers' compensation insurance under one policy
• Available to non-builder contractors and associated businesses
• Proactive risk management to prevent injuries and claims, reducing your insurance costs
• Sold through professional, independent insurance agents

Administration of the new program will be handled by J. Freeman and Associates in Greenville, SC, with Patriot National Insurance Group as the insurance underwriter.

All HBA of Greenville members participating in the plan will receive a 5 percent discount on their premiums.  Combine this discount with superior claims handling and group purchasing power and you have a program worth considering!

For a no-cost, no-obligation quote, please contact your insurance agent or call Christie Hannon at J. Freeman and Associates at 864-331-4400.

HBASC and Workers Comp Commission developing a coverage verification web portal

The HBA of South Carolina and the S.C. Workers Comp Commission are working on a web portal for home builders and general contractors to verify workers comp coverage of their subcontractors.

The goal of the site is for contractors to register to receive notifications of changes in coverage of their subcontractors.  If a subcontractor's coverage lapses, the contractor will receive an email notifying him or her of the change of status.

The new site is pending a memorandum of understanding between the HBA of South Carolina and the S.C. Workers Comp Commission.  The purpose of the project is the protect contractors from becoming the employer of record when a subcontractor on their job site allows his or her worker's comp insurance coverage to lapse.

This project will benefit the entire industry and is being undertaken by the Home Builders Association of South Carolina.

SCHBSIF Receives NAHB SAFE Award

The South Carolina Home Builders Self Insurers Fund was named the National Association of Home Builders Associate Member Safety Program of the Year. The award will be presented on February 7 at the International Builders Show in Orlando, Florida. 

Your Home Builders Association of Greenville endorses the SIF and recommends it to our members as a source for your Worker's Compensation Insurance needs.

The Safety Award For Excellence (SAFE) recognizes NAHB member companies, workers, and other individuals for the excellent safety programs that make them leaders in the residential construction industry. The NAHB annually recognizes those who have worked to achieve exemplary safety and health in residential construction. There were more than 40 applicants for SAFE awards in 2011.

The SCHBSIF assists its members in providing safe work places by conducting safety training that is specific to the home building industry. It also provides on-site safety surveys for its more than eight hundred members. These surveys assist home builders and subcontractors in identifying hazards and provide them with recommendations for corrective actions that reduce the potential for injuries in the workplace.

SCHBSIF Announces New Name

South Carolina Home Builders Self Insurance Fund has announced the name of the insurance company that will succeed the fund when it converts to a mutual insurance company this summer: South Carolina Home Builders Insurance Group.

The SIF is planning to convert to a mutual insurance company on July 1, 2011, for all new policies. Existing policy holders will have their insurance written by the new company beginning in 2012.

The conversion to a mutual insurance company is intended to make the Home Builders Association's workers compensation insurance program more competitive.

SCHBSIF Announces Rate Decrease

The S.C. Home Builders Self Insurance Fund, a workers comp insurance company that write policies exclusively for members of the Home Builders Association of South Carolina, has announced two moves that will reduce costs for home builders.

The Board of Trustees of the SIF has voted to reduce rates effective January 1, 2011, by an average of 5 percent. All rates will be reduced but the reduction will vary by class code.

In addition, the SIF has reduced minimum premium amounts. Also effective January 1, 2011, the annual minimum premium will be decreased from $1,200 to $900. In addition, the monthly minimum premium payment will no longer be required. The annual minimum premium will still apply.

"All of these changes will help home builders navigate this difficult downturn in the housing market," Tom Dillard, president of the HBA of Greenville, said.

SCHBSIF Can Now Write for Non-Residential Accounts!

The South Carolina Home Builders Self Insurers Fund (SCHBSIF) announced this week that it has begun writing Workers’ Compensation policies for non-residential accounts.

SCHBSIF is an exclusive member benefit of the Home Builders Association of South Carolina. Members of the HBA of Greenville are eligible to purchase Workers' Compensation Insurance from SCHBSIF. The SIF was organized in 1995 and its mission is to provide stable, affordable Workers' Compensation Insurance to members of the Home Builders Association.

Policies now being written include commercial general contractors and subcontractors who are engaged in new construction, upfitting, or renovations of non-residential projects. SCHBSIF is now able to provide coverage to entities whose exposures are 100% commercial and who perform on-site work at heights of 3 stories or less. Risks that fall outside this scope may be considered on an individual basis.

SCHBSIF also will consider businesses that provide services such as electrical or mechanical maintenance to industrial concerns like manufacturing facilities and governmental entities.

Membership in the Home Builders Association of South Carolina continues to be a requirement for participation in the SCHBSIF.

For questions regarding these new opportunities please contact Brandy Shealy, SCHBSIF Underwriting Manager, at bshealy@schbsif.com or 800-678-8178.

In addition, SCHBSIF has announced that it will be converting to a mutual insurance company in 2011. "Our target for conversion to mutual is July 1, 2011," said Andrew Woodham, SCHBSIF Marketing Director. "Conversion to mutual will create further opportunities for insurance products for HBA members."

For a list of insurance professionals who will help you purchase Workers' Compensation Insurance from SCHBSIF, click here.

SIF News: What is a "Good" Certificate of Insurance

Accepting the wrong insurance certificate from a subcontractor can be an expensive mistake for a Home Builders. More importantly, allowing a subcontractor to perform work for you until you obtain a valid Certificate of Insurance (COI) also will lead to problems for you and your company.

According to the S.C. Home Builders Self Insurers Fund, a new COI must be requested from each subcontractor at the start of every new job. Jobs for the same type of work but at different locations (different lots) require a new COI for each location unless you have a written contract specifying all multiple locations in the same contract.

In addition, you should not accept an insurance certificate from the subcontractor. Instead, you should receive the COI from the subcontractor's insurance agent.

If there is any appearance of alteration of Insurance--a different font type, obvious white out and retyping of information--please contact the insurance agent listed on the COI immediately for verification. Keep a record of the person with whom you speak and the date of the conversation.

If you know that the COI you have received is not valid, it is deemed to be insurance fraud and should be reported to the S.C. Attorney General's office.

You can read more about accepting COIs at the www.HBAofGreenvill.com by clicking here.

If you have any questions, please contact the SIF directly at 800-678-8178.

SCHB Self Insurers Fund announces premium refund for members

For the second consecutive year, the S.C. Home Builders Self Insurers Fund (SIF) has announced a premium refund to it members. The SIF is a cooperative fund available exclusively to Home Builders Association members in South Carolina. The premium refund will total $750,000.

The SIF workers' compensation claims experience continues to be favorable and the Board of Trustess made the decision to refund a portion of premiums paid by members participating in the fund in 2009. Members who participated in the SIF in 2009 for their workers' compensation insurance needs will receive a refund. The refund will be distributed in August.

The SIF was formed in 1995 under the leadership of the Home Builders Association of South Carolina. The SIF's purpose is to serve the needs of members of the Home Builders Association in South Carolina. The SIF provides a stable, cost-effective source of workers' compensation coverage for their members. Over its 15-year history the SIF has fulfilled its mission and remained available to members of the Home Builders Association in South Carolina when other insurance companies have stopped writing workers' compensation insurance coverage or left the state completely.

SCHBSIF: an exclusive benefit of members of the Home Builders Association of South Carolina.

SIF Announces New Program to Improve Contractor Cash Flow

The S.C. Home Builders Self Insurers Fund announced that is can now accept a surety bond in lieu of the 25% cash deposit currently required. This new program is available to both new and current members of the Fund.

Bond approval is subject to applicant’s credit score and/or financial position. For example: assuming you qualify for the bond, and your 25 percent deposit is $5000, your annual bond premium will be $250. As a result, the cash demanded of the contractor for his or her workers comp insurance will be reduced by $4750.

Contact your SCHBSIF insurance agent for more detail on your specific situation. Search for member insurance agents at www.hbaofgreenville.com.

Claims Cost you More When your Workers Comp Premiums Are Lower

A major factor in underwriting of Workers Compensation insurance is loss ratio, defined as losses divided by premiums. Not long ago a loss of $10,000 by one contractor paying $20,000 a year in premiums would generate a loss ration of 50 percent. However, in today's economy of smaller payrolls that same $10,000 loss, coupled with an annual premium of $10,000, would generate a loss ratio of 100 percent and make that contractor a much less attractive risk to an underwriter.

In order to protect yourself from unwanted premium increases, or the dreaded cancellation notice, loss management and aggressive safety programs are a must.

Don’t cut back on your safety program. Time and money spent on loss control now will generate a better return than it did when your premiums were much higher. To make sure your safety program is up to the task, contact the Loss Control Department at the S.C. Home Builders Insurance Self Insurance Fund (SCHBSIF) by calling 800-678-8178.

Did you know that builder members of the Home Builders Association of Greenville have exclusive access to workers comp insurance with SCHBSIF? Take advantage of all of the benefits of membership by visiting http://www.hbaofgreenville.com/page/advantage.