Home > Fraud Awareness, SID Information > Changing It Up: Employers That Avoid Premiums by Risk Shifting

Changing It Up: Employers That Avoid Premiums by Risk Shifting

Risk shifting is a scheme where employers cancel their policy and/or create a new policy to intentionally avoid negative claims experience ratings and past due balances associated with their original policy.

A Case in Point
BWC created a policy for a Cleveland area automotive repair company after an industrial injury claim was filed by an employee. In response to the claim, the owner of the company attempted to apply for new coverage in person and was advised by BWC that he could only have one policy as a sole proprietor. Later, the owner attempted to open another policy online for his automotive company online but the policy was rejected after an initial review by BWC. A BWC investigator visited the business workplace to discuss the employer’s non-compliance and observed an updated BWC certificate of coverage. The investigator questioned the owner about the new certificate and was advised that owner sold the business to his wife. After review, the investigator determined that new coverage for this policy was in the owner’s wife’s name but the deposit was paid with the owner’s credit card and the receipt was signed by the owner. The application was not truthful about pre-existing policies associated with the business. The owner pled guilty to one fourth degree felony count of Workers’ Compensation Fraud and one fifth degree felony count of Forgery.

Red flags that may indicate risk shifting include:

  • Multiple policies associated with one address;
  • Businesses with high experience and premium suddenly canceling its policy; and
  • Different policies operating with the same employees.

If you suspect that an employer is risk shifting, let us know. You may report it online at http://bit.ly/reportfraud or you may speak with a fraud hotline agent by calling 1-800-OHIOBWC.

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