A self-insured employer has denied a claim but the file does not properly document the reason for the denial. What is the amount of the penalty?

A self-insured employer has denied a claim but the file does not properly document the reason for the denial. What is the amount of the penalty?

• A. $500
• B. $1000
• C. $10,000
• D. $5000

Answer: (D)

When a self‑insured employer denies a workers’ compensation claim, the denial must be documented in the claim file with the specific reasons and supporting evidence. If the file does not properly document why the claim was denied, a penalty is imposed to encourage thorough and transparent handling of denials. The amount for this improper denial and lack of documentation is five thousand dollars. This fixed penalty serves as a deterrent against unclear or unjustified denials and helps ensure claimants understand the basis for the decision. Other dollar amounts listed in the choices do not apply to this particular failing. Rules around late payments or other filing deficiencies exist, but the scenario described specifically targets the failure to document the denial reason, which carries the five‑thousand‑dollar penalty.

When a self‑insured employer denies a workers’ compensation claim, the denial must be documented in the claim file with the specific reasons and supporting evidence. If the file does not properly document why the claim was denied, a penalty is imposed to encourage thorough and transparent handling of denials.

The amount for this improper denial and lack of documentation is five thousand dollars. This fixed penalty serves as a deterrent against unclear or unjustified denials and helps ensure claimants understand the basis for the decision.

Other dollar amounts listed in the choices do not apply to this particular failing. Rules around late payments or other filing deficiencies exist, but the scenario described specifically targets the failure to document the denial reason, which carries the five‑thousand‑dollar penalty.