Short-term Disability Fraud

[CoffeeBlack]

A close relative of mine went on short-term disability leave back in September right before having early-stage breast cancer surgery and has been receiving short-term disability payments from her employer's insurance company ever since. Following surgery and subsequent radiation (she didn't need chemo), more and more "stuff" started appearing at her house that she'd been buying with the insurance money--new clothes, a new sofa, she's talking about getting a treadmill, etc.--and spending hours online looking up genealogy-related stuff, which is a big hobby of hers. She's also taken a number of trips to see relatives around the state and has gone with them on hobby-oriented excursions for several days at a time (some of the relatives are self-employed while others are retired) and apparently having a grand old time. Meanwhile she's had no medical treatments in nearly two months--she finished radiation in January--but she says she still doesn't feel well enough to go back to work, and oh yeah, she also mentioned out loud on at least one occasion that she's making more money from short-term disability than she does from her job. But she feels really lousy and can't go back to work because she's not ready, yadda yadda yadda, but you wouldn't know it from the way she's been acting and the way she's been spending money on things she doesn't need to live.

I'm waiting to hear back from her insurance company on an anonymous call I placed to their fraud hotline, but it got me to wondering...I and many other relatives are seeing her do all of these things, but she's apparently still giving her doctor this line that she's not ready to go back to work, etc., and besides the fact that she's stealing from the system, it's really creating major tensions within the family. So what I'm asking is, once I give the insurance company the details of what I know and what I've observed, how can it be proven that she's milking the system and what can be done to stop her? In the back of my mind I'm thinking it could even get her arrested if this sort of fraud is deemed serious enough, but not having dealt with anything like this before, I'm not sure how this plays out. Anyone have any insight on the process in reporting insurance/disability fraud and how insurance investigators go about proving something like this? I realize people can't give legal advice on here, but I'm just trying to understand how the system works and anything else that might be a consideration.

 

[somarco]

Disability carriers investigate some, but not all claims. Since most STD plans cover 13 - 26 weeks at most, and usually pay out no more than 50% of gross pay, the likelihood of an investigation is slight. In her case, it may be that she has accumulated comp time or sick days resulting in double payment.

Regardless of the details, the carrier may or may not choose to investigate based on the anonymous call. Like anything else in life, you weigh the cost against the benefit. The carrier will look at what they have paid and make a decision as to whether or not to take more than a cursory look at her claim.

Economics aside, there is always someone looking to game the system and we all pay for their poor choices.

 

[LGilmore]

well, could it be that she's decided that a long life is not in the cards and is just spending savings along with di pay as their is no point in planning on living to 90?

Short term di is just that short term. It will run out and your relative may have to make a decision then.

What I find interesting is that you called to claim fraud so quickly and you are overly concerned about it. What other issues are at play here?

Obviously, this must not be a favorite relative..

 

[G.Gordon]

I doubt she's making more from STD than when she worked unless she's cashing in time like someone mentioned above. I wouldn't get too alarmed for a STD claim that seems in the gray area of ethics. If she went on into LTD or tried to file SSI then I'd blow the whistle.

 

[CoffeeBlack]

well, could it be that she's decided that a long life is not in the cards and is just spending savings along with di pay as their is no point in planning on living to 90?

Short term di is just that short term. It will run out and your relative may have to make a decision then.

What I find interesting is that you called to claim fraud so quickly and you are overly concerned about it. What other issues are at play here?

Obviously, this must not be a favorite relative..

The relative is my mother... And she's not only heading for a financial train wreck but she's gaming the system and playing with fire. I want to stop her from going any further down this road before anything bigger erupts. I think I have a vested interest in trying to stop this train wreck from getting any worse. So any advice to that end would be greatly appreciated.

 

[LGilmore]

"The relative is my mother"

Well, trying to get her busted on fraud charges really isn't going to help her much, unless your idea of help is jail and having what ever money she has spent in fines and defense.

What is your vested interest? Isn't mom's assets mom's?

The best way to show your disaproval is to say so directly to her and then just stop seeing her until things change. I don't see how ratting out your mom is doing her a favor. It sounds more like revenge for a past injustice towards you.

 

[CoffeeBlack]

"The relative is my mother"

Well, trying to get her busted on fraud charges really isn't going to help her much, unless your idea of help is jail and having what ever money she has spent in fines and defense.

What is your vested interest? Isn't mom's assets mom's?

The best way to show your disaproval is to say so directly to her and then just stop seeing her until things change. I don't see how ratting out your mom is doing her a favor. It sounds more like revenge for a past injustice towards you.

Mom has no assets. Her actions and attitudes since she started getting short-term disability have been creating a huge rift in the family. Mom is basically throwing it back in everyone's face that she's getting all this stuff, and it's creating massive discord within the family...she's getting all this money and going off on trips around the state doing stuff she WANTS to do, but she says she doesn't feel well enough to go back to work, etc. Meanwhile, many of the rest of us are fearing for our jobs right now--my company laid off 10 percent of its work force three weeks ago, and yesterday the president of our company was fired and will be replaced by a floating interim president who will be overseeing two similar companies that our parent company owns. There's not much job security to speak of at the moment for just about anyone in my family who hasn't yet retired--I'm looking over my shoulder wondering how far my own position is from the ax--and really, my mother's attitudes are secondary to the real issue--she's stealing from her employer, the way this looks. I don't know any other way to interpret what she's doing. Maybe there are technicalities within the disability insurance industry that address such things as my mom is doing, but from a layman's perspective, it looks like she's stealing from the system, and I can't see how this could be justified in any way, shape or form.

 

[arnguy]

Wow, that's a heck of position to be in, CoffeeBlack. There may be a "whistleblowers" reward for you, but to turn in your mom smacks of Nazi Germany. Of course, Bernie Madoff's sons allegedly turned him in.

 

[LGilmore]

Well, let your mom make her own bed. The industry does have people who check up on it through observation and medical records check. IF they feel the need to get money returned, they will.

However, if you are talking about a couple hundred or so a week, the cost to go after her would be greater than the benefit of catching her. IF it's short term disability, it will run out and your mom's on her own then. She may return to work to find herself laid off.

Disability companies have the legal right to investigate, deny and pursue recourse on any claim. It doesn't even have to be right away.

Do you all live in the same place? Does mom own or rent? Do you work for the same company? Do you know how much she collects?

 

[b61mack]

i know this is an old post, but wow. this guy has major issues. his mother has breast cancer. and he is worried, about her collecting STD. which is 50- 75% of you normal pay..... he should be worried about her health....he is a ,very bad man!!!!!!!!!!!!!