Arizona Legislation Seeks to Improve Workers' Compensation

Date: March 31, 2015

Bills aim to protect businesses from false claims, more.

State Rep. Karen Fann has a goal: to create a fair workers’ compensation program that helps those who need it while protecting Arizona employers like Mark Giebelhaus from frivolous lawsuits.

“In our experience, workers who file fraudulent claims are also repeat offenders,” says Giebelhaus, president of Marlin Mechanical Corporation, a plumbing-heating-cooling service in Phoenix. “They know how to scam the system and move from employer to employer.”

Fann has proposed three bills that aim to improve workers’ compensation in the state. HB 2331 would warn anyone filing a workers’ compensation claim of the fines and penalties for making a false claim.

“I call it a ‘truth and information’ bill,” Fann says. “I don’t think some of these people realize how much the fines are and the penalties are when you make fraudulent claims.”

Under the bill, the claimant would have to sign a document stating that knowingly filing a false claim is a felony, and punishment can include a $50,000 fine, up to a year and a half in prison, and the forfeiture of benefits.

“If they knew that once they have been caught in a fraudulent claim, they will no longer receive temporary or permanent disability compensation, they would no longer have any incentive to do so,” Giebelhaus says.

NFIB Arizona State Director Farrell Quinlan agrees that the bill would benefit small business owners. “We take seriously whatever fraud is being perpetrated in the system, because it increases everybody’s rates,” he says.

In addition, Fann’s HB 2334 would make it more difficult for workers to file “bad faith” claims against insurance companies and self-insured employers.  

According to the bill, workers must file such claims with the Industrial Commission of Arizona within 60 days of the incident. However, companies would face an increased penalty of $5,000 if found to have acted in bad faith.

A third bill, HB 2346, would make it clear that workers’ compensation carriers aren’t required to reimburse employees’ costs associated with medical marijuana use.

The Arizona Department of Health Services reported Arizonans spent about $112 million on marijuana last year.


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