Workers’ compensation insurance fraud reporting.

Senator Archuleta's workers' compensation fraud detection measure expands information sharing between insurers and state agencies while establishing new protocols for accessing employment records. The legislation requires insurers and rating organizations to notify the Employment Development Department (EDD) when detecting potential premium fraud, adding to existing requirements to alert district attorneys and the Department of Insurance's Fraud Division.

The bill creates a framework for insurers to obtain detailed payroll data from the EDD to verify information provided in workers' compensation claims and policies. Access to these records requires insurers to specify their investigative needs and obtain EDD determination that the request aligns with legitimate fraud investigations. Insurers must reimburse the EDD quarterly for costs associated with fulfilling information requests. The legislation restricts use of the obtained records to fraud investigations and prohibits sharing with law enforcement except through established fraud referral channels.

To protect worker privacy while enabling fraud detection, the measure mandates confidential handling of all shared information between authorized agencies. The EDD must evaluate whether information requests would compromise ongoing investigations or violate federal law before release. Insurers and agencies receiving data must follow prescribed protocols for secure transmission and storage of sensitive employment records.