Home > Fraud Awareness, SID Information > Turning a Blind Eye to the Pot: Employers That Operate without Coverage

Turning a Blind Eye to the Pot: Employers That Operate without Coverage

Financial PlanningOhio law requires employers with one or more employees to obtain workers’ compensation coverage.

When it comes to employers operating without coverage, we typically see the following scenarios:

  • An employer is operating and has never obtained coverage.
  • An employer is operating and has obtained coverage, but failed to maintain it (also known as lapsed coverage).
  • An employer knowingly submits a non-sufficient payment in an attempt to secure coverage and a new certificate of coverage, with their coverage being false.

Claims can be filed against non-compliant employers, aggravating the loss to the “pot” (the State Fund). This additionally impacts the premiums of compliant employers. Noncompliant employers are responsible dollar for dollar for claims costs incurred during a non-covered period. Noncompliant employers may be subjected to criminal and civil proceedings, such as felony workers’ compensation fraud charges, liens and injunctions.

After other BWC departments have made repeated attempts to bring noncompliant employers into the compliance, they typically refer these employers to SID’s Employer Fraud Team. Here are two examples:

A Case in Point: Lapsed Employer with Claims

SID was advised by BWC’s Premium Auditing Department that a Harrison, OH business has been operating with lapsed coverage, has had multiple claims filed against its policy and failed to respond to several inquiries from their staff. An investigation by the Employer Fraud Team concluded that the company had a total of eight claims filed against its policy and owed approximately $73,000 in past due premiums, in addition to non-compliant claims costs. The investigation was referred to the county prosecutor which resulted in a fourth degree felony conviction against owner of the business.

A Case in Point: Lapsed Employer That Issued a NSF Check

SID received information from BWC’s Collection Department that indicated a Mansfield, OH employer submitted a $4,400 check in order to reinstate its coverage. The employer advised BWC that he needed a valid BWC certificate in order to obtain a new contract he was bidding. This check was later returned due to insufficient funds. The Employer Fraud Team referred their investigation to the county prosecutor for passing a bad check, theft, and workers’ compensation fraud charges. The employer was convicted on all three charges, each a fifth degree felony.

SID previously completed an investigation which proved that this employer submitted an altered BWC certificate in order to obtain work. Based on that investigation, the owner of the business was prosecuted in Richland County and found guilty of forgery and tampering with records.

Did you know?

Coverage is required for domestic household employees (e.g., cooks, gardeners, housekeepers, babysitters, etc.) who earn $160 or more during a calendar quarter.  Many home owners are not aware of this coverage requirement until it’s too late… someone gets injured on their property and files a claim.

For more information about employer coverage issues, including how to file for coverage online, visit: https://www.ohiobwc.com/employer/.

What you can do.

You can determine if an employer operating in Ohio has workers’ compensation coverage by visiting BWC’s online employer lookup at: https://www.ohiobwc.com/provider/services/mcolookup/nlbwc/default.asp.

If you suspect that an employer is operating without workers’ compensation, let us know. You can report it online at http://bit.ly/reportfraud or you can speak with a fraud hotline agent by calling 1-800-OHIOBWC.

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