Over the course of your career as a benefits manager, odds are that you’ll eventually run into an employee with a paid disability claim that doesn’t seem to be on the up and up.

On a nationwide basis, fraudulent long-term disability claims are a $5.5 billion drain on employers. The cost includes claim payouts, subsequent premium increases, lost productivity and staffing problems. The good news: There are legal ways to fight back.

Common red flags

None of the following factors automatically justify a full-scale investigation. But they add up. The more factors in place, the greater the likelihood of a false disability claim:

• The worker is a new hire and has a history of short-term employment
• He or she was recently demoted or clashed with a supervisor
• The employee is unusually aggressive about the claim (e.g., hires a lawyer as a first step) and/or
• The story about the cause or severity of the injury keeps changing.

According to experts, either of the first two factors in combination with either one or both of the latter two could provide cause to probe a little deeper into the claim.

Go through your carrier

What should you do if think you smell a rat? Alert your plan carrier about
your suspicions and let the insurer’s investigation department handle it.

The biggest mistake that employers make in these circumstances is to simply take matters into their own hands. Why? Because even if you uncover evidence of fraud, the information might not hold up in court.

Tags: Disability