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Who really defrauds workers’ compensation?

February 21, 2012 by Dustin Bleizeffer 1 Comment

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Who really defrauds workers’ compensation?

Here’s a gut-check and some statistics that should not be forgotten.

There’s a notion that safety-net social programs break the bank. Workers’ compensation is a favorite target. Those no-good ankle-twisters bringing down Wall Street.

Dustin Bleizeffer, WyoFile editor-in-chief

Did you know; of Wyoming’s 18,228 employers 1,212 of them are delinquent on their Wyoming Workers’ Compensation premiums — to the tune of $943,498.73, according to state officials? That’s 6.6 percent of Wyoming’s employers who pay into Wyoming Workers’ Compensation — delinquent. $1 million.  According to Wyoming officials, employers do not enjoy legal immunity for their own proven negligence in a worker injury/death during the period for which they are delinquent. But they are not kicked out of the workers’ compensation program.

Employees in Wyoming do not enjoy the same leniency when it comes to delinquency. If an injured worker files 1 day late, no case, no benefits. No matter.

NOTE TO EMPLOYEES: Do not rely on your employer to file a workers’ compensation claim on your behalf. There is a deadline, and make sure you file.

In 2008, when the legislature was preparing to make modest increases (mostly cost of living) for beneficiaries, there was a lot of talk about injured workers defrauding the system and posing a financial threat to the fund.

But fraud on the part of employees is more mushy, and too difficult to track, according to state officials. Back in 2008, the head of Wyoming’s workers’ compensation division testified before legislators that employee fraud, according his estimate, was 10 percent to 20 percent of all claims — based on national statistics.

Yet no evidence was presented to back that up.

Instead, Sen. Charlie Scott (R-Casper), explained to me, “It was SWAG — scientific wild-assed guess.”

Back in 2008, when the legislature agreed to modest increases, the workers’ compensation fund was $1.08 billion, and lawmakers feared that increasing COLA payments would deteriorate the fund.

A year later the fund had grown 6 percent to $1.15 billion.

And that same year (2009), one prominent skeptic of the reforms admitted the reforms were perhaps too modest.

“Turns out there was plenty of money to take care of employers and employees. I think the fund is in very good shape,” Lynn Birleffi, executive director of the Wyoming Lodging and Restaurant Association told the Casper Star-Tribune.

Now, the market value of the fund stands at about $1.35 billion. Keep in mind, that’s not all un-dedicated. There are beneficiaries entitled to payments that will continue for years. It takes actuaries to calculate the difference between obligated debts and forecasted debts. But the bottom-line; those modest COLA increases DID  NOT break the bank.

This is the kind of hindsight that should provide lessons for moving forward. And as Wyoming contemplates how not to injure and kill workers, it should also make sure that when workers do get hurt or killed, that we live up to the bargain.

Editor’s note: This story was corrected on February 23, 2012. According to Wyoming officials, employers do not enjoy legal immunity for their own proven negligence in a worker injury/death during the period for which they are delinquent. But they are not kicked out of the workers’ compensation program.

— Contact Dustin Bleizeffer at 307-577-6069 or [email protected].

— If you enjoyed this column and would like to see more quality Wyoming journalism, please consider supporting WyoFile: a non-partisan, non-profit news organization dedicated to in-depth reporting on Wyoming’s people, places and policy.

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Filed Under: Energy Report, Power to the People

Dustin Bleizeffer

About Dustin Bleizeffer

Dustin Bleizeffer has worked as a coal miner, an oilfield mechanic, and for 20 years as a statewide reporter and editor primarily covering the energy industry in Wyoming. Most recently he was Communications Director at the Wyoming Outdoor Council, a John S. Knight Journalism Fellow at Stanford, and WyoFile editor-in-chief. He lives in Casper. You can reach him at (307) 267-3327, [email protected] or follow him on Twitter @DBleizeffer.

Reader Interactions

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  1. Dustin BleizefferDustin Bleizeffer says

    February 23, 2012 at 4:25 pm

    Steve Czoschke, administrator of Wyoming’s Workers’ Safety and Compensation Division told me today, “I can’t quantify how much money fraudulent workers claims cost the Division at this time. The Division recently established a Fraud Management section to examine the fraud issue, so hopefully we will have more definitive information to provide in the future.”

    — WyoFile editor-in-chief Dustin Bleizeffer

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