North Carolina Threatens Jail Time Over Workers’ Unpaid Claims

North Carolina officials are requiring insurers to expedite the payment of workers’ compensation patients’ medical and wage-loss benefits or risk being sentenced to jail.

The North Carolina Industrial Commission has ordered more than a dozen employers to attend a May 22 hearing in an attempt to resolve claims that have been dragged though the legal system for decades. Employers who refuse to pay or settle part of a claim will face contempt charges and be ordered to jail.

The commission is reviewing its contempt procedures as part of an effort to better enforce the state’s workers’ compensation requirement, said Pamela Young, chair of the commission.

The commission’s action came within weeks of a study that found that tens of thousands of employers may be operating without coverage. The North Carolina Rate Bureau reported that insurers are providing coverage to more than 140,000 businesses but there are upwards of 170,000 employers with more than four employees in the state.

Commission officials acknowledge they only find out an employer is without coverage when an injured worker files a claim. Also, they say they have little leverage to enforce the law. Firms found not in compliance can be fined $100 per day and the cost of any benefits and medical expenses the injured worker should have collected.

The Industrial Commission’s Fraud Unit reported that since January 2011, it has only pursued 225 cases where employers where found not to have proper coverage. The unit reported collecting $30,500 in fines, which equals about $135 per case.