34A-2-110.Workers' compensation insurance fraud -- Elements -- Penalties --
Notice.
(1) As used in this section:
(a) "Corporation" has the same meaning as in Section 76-2-201.
(b) "Intentionally" has the same meaning as in Section 76-2-103.
(c) "Knowingly" has the same meaning as in Section 76-2-103.
(d) "Person" has the same meaning as in Section 76-1-601.
(e) "Recklessly" has the same meaning as in Section 76-2-103.
(f) "Thing of value" means one or more of the following obtained under this chapter or
Chapter 3, Utah Occupational Disease Act:
(i) workers' compensation insurance coverage;
(ii) disability compensation;
(iii) a medical benefit;
(iv) a good;
(v) a professional service;
(vi) a fee for a professional service; or
(vii) anything of value.
(2) (a) A person is guilty of workers' compensation insurance fraud if that person
intentionally, knowingly, or recklessly:
(i) devises a scheme or artifice to do the following by means of a false or fraudulent
pretense, representation, promise, or material omission:
(A) obtain a thing of value under this chapter or Chapter 3;
(B) avoid paying the premium that an insurer charges, for an employee on the basis of
the underwriting criteria applicable to that employee, to obtain a thing of value under this chapter
or Chapter 3; or
(C) deprive an employee of a thing of value under this chapter or Chapter 3; and
(ii) communicates or causes a communication with another in furtherance of the scheme
or artifice.
(b) A violation of this Subsection (2) includes a scheme or artifice to:
(i) make or cause to be made a false written or oral statement with the intent to obtain
insurance coverage as mandated by this chapter or Chapter 3 at a rate that does not reflect the
risk, industry, employer, or class code actually covered by the insurance coverage;
(ii) form a business, reorganize a business, or change ownership in a business with the
intent to obtain insurance coverage as mandated by this chapter or Chapter 3 at a rate that does
not reflect the risk, industry, employer, or class code actually covered by the insurance coverage;
(iii) misclassify an employee as one of the following so as to avoid the obligation to
obtain insurance coverage as mandated by this chapter or Chapter 3:
(A) an independent contractor;
(B) a sole proprietor;
(C) an owner;
(D) a partner;
(E) an officer; or
(F) a member in a limited liability company;
(iv) use a workers' compensation coverage waiver issued under Section 31A-22-1011 to
deprive an employee of workers' compensation coverage under this chapter or Chapter 3; or
(v) collect or make a claim for temporary disability compensation as provided in Section
34A-2-410 while working for gain.
(3) (a) Workers' compensation insurance fraud under Subsection (2) is punishable in the
manner prescribed in Subsection (3)(c).
(b) A corporation or association is guilty of the offense of workers' compensation
insurance fraud under the same conditions as those set forth in Section 76-2-204.
(c) (i) In accordance with Subsection (3)(c)(ii), the determination of the degree of an
offense under Subsection (2) shall be measured by the following on the basis of which creates the
greatest penalty:
(A) the total value of all property, money, or other things obtained or sought to be
obtained by the scheme or artifice described in Subsection (2); or
(B) the number of individuals not covered under this chapter or Chapter 3 because of the
scheme or artifice described in Subsection (2).
(ii) A person is guilty of:
(A) a class A misdemeanor:
(I) if the value of the property, money, or other thing of value described in Subsection
(3)(c)(i)(A) is less than $1,000; or
(II) for each individual described in Subsection (3)(c)(i)(B), if the number of individuals
described in Subsection (3)(c)(i)(B) is less than five;
(B) a third degree felony:
(I) if the value of the property, money, or other thing of value described in Subsection
(3)(c)(i)(A) is equal to or greater than $1,000, but is less than $5,000; or
(II) for each individual described in Subsection (3)(c)(i)(B), if the number of individuals
described in Subsection (3)(c)(i)(B) is equal to or greater than five, but is less than 50; and
(C) a second degree felony:
(I) if the value of the property, money, or other thing of value described in Subsection
(3)(c)(i)(A) is equal to or greater than $5,000; or
(II) for each individual described in Subsection (3)(c)(i)(B), if the number of individuals
described in Subsection (3)(c)(i)(B) is equal to or greater than 50.
(4) The following are not a necessary element of an offense described in Subsection (2):
(a) reliance on the part of a person;
(b) the intent on the part of the perpetrator of an offense described in Subsection (2) to
permanently deprive a person of property, money, or anything of value; or
(c) an insurer or self-insured employer giving written notice in accordance with
Subsection (5) that workers' compensation insurance fraud is a crime.
(5) (a) An insurer or self-insured employer who, in connection with this chapter or
Chapter 3, Utah Occupational Disease Act, prints, reproduces, or furnishes a form described in
Subsection (5)(b) shall cause to be printed or displayed in comparative prominence with other
content on the form the statement: "Any person who knowingly presents false or fraudulent
underwriting information, files or causes to be filed a false or fraudulent claim for disability
compensation or medical benefits, or submits a false or fraudulent report or billing for health care
fees or other professional services is guilty of a crime and may be subject to fines and
confinement in state prison."
(b) Subsection (5)(a) applies to a form upon which a person:
(i) applies for insurance coverage;
(ii) applies for a workers' compensation coverage waiver issued under Section
31A-22-1011;
(iii) reports payroll;
(iv) makes a claim by reason of accident, injury, death, disease, or other claimed loss; or
(v) makes a report or gives notice to an insurer or self-insured employer.
(c) An insurer or self-insured employer who issues a check, warrant, or other financial
instrument in payment of compensation issued under this chapter or Chapter 3, shall cause to be
printed or displayed in comparative prominence above the area for endorsement a statement
substantially similar to the following: "Workers' compensation insurance fraud is a crime
punishable by Utah law."
(d) This Subsection (5) applies only to the legal obligations of an insurer or a self-insured
employer.
(e) A person who violates Subsection (2) is guilty of workers' compensation insurance
fraud, and the failure of an insurer or a self-insured employer to fully comply with this
Subsection (5) is not:
(i) a defense to violating Subsection (2); or
(ii) grounds for suppressing evidence.
(6) In the absence of malice, a person, employer, insurer, or governmental entity that
reports a suspected fraudulent act relating to a workers' compensation insurance policy or claim
is not subject to civil liability for libel, slander, or another relevant cause of action.
(7) In an action involving workers' compensation, this section supersedes Title 31A,
Chapter 31, Insurance Fraud Act.
Amended by Chapter 263, 2008 General Session
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