August 10, 2015
Disability programs are vital for a nation that supports its citizens. In the United States, federal employees, including postal workers, who suffer employment-related injury or illness are entitled to workers’ compensation under the Federal Employees’ Compensation Act (FECA).
The U.S. Postal Service funds workers’ compensation benefits for employees who sustain job-related injuries. In fiscal year (FY) 2014, the Postal Service incurred over $1.3 billion in workers’ compensation expenses. In addition, the Postal Service estimated its liability for future workers’ compensation costs at nearly $17.1 billion. The U.S. Department of Labor’s Office of Workers’ Compensation Programs (OWCP) administers the workers’ compensation program and then bills the Postal Service for reimbursement.
While most compensation claims are legitimate, fraud and abuse do occur. The U.S. Postal Service Office of Inspector General (OIG) focuses resources on identifying claimants and providers who defraud the system. In FY 2014, OIG investigations saved the Postal Service more than $275 million in future workers’ compensation costs, and arrested 82 individuals for workers’ compensation fraud.
One recent successful case highlights the type of cases our agents investigate:
A postal letter carrier had been receiving workers’ comp benefits since 2001 after claiming total disability from a back injury at work. Investigators, however, discovered he had started a landscaping company shortly after his claimed injury and was routinely working at that company. Agents observed the individual driving a dump truck, operating a riding lawn mower and a tractor, and directing the activities of other individuals at customer properties. Undercover investigators also hired the former carrier to perform landscaping work for them, which they video recorded and presented as evidence to prosecutors and the Department of Labor (DOL). These activities exceeded the former employee’s stated limitations and he failed to inform the DOL of his involvement in this business, both of which resulted in his conviction and the termination of his benefits.
This successful investigation alone saved the Postal Service approximately $664,000 in future workers’ compensation payments. What suggestions do you have for preventing workers’ compensation fraud? And if you suspect fraud by either a Postal Service employee or provider, please contact our office at 888-877-7644.