December 2004/January 2005

Everyone hopes it never happens, but it often does.

People fall and hurt themselves at work, or they have strokes, or they’re blindsided in traffic while driving home and the resulting catastrophic health condition prevents them from working full-time – or at all.

When such tragedies occur, employees typically file disability claims to make up for their lost earning power, resulting in costs to employers and payouts from insurance carriers that stretch into the billions of dollars every year.

Forensic accountants frequently assist employers and insurers in determining fair compensation for such claimants. Among them is Suzanne Tarchala, a Certified Public Accountant with Matson, Driscoll and Damico in Detroit.

Tarchala deals exclusively with insurance loss accounting and often investigates individual disability claims for insurance companies, independent adjusting firms and attorneys.

“I spend a minimum of a day a week at insurance companies, looking through historical financial records like income tax returns, paycheck stubs and billing documents,” Tarchala said. “We’re trying to determine how a person’s income has been affected directly by their disability.”

“We’re also very familiar with insurance contracts,” she added. “Those types of contracts are very specific, and it’s the contract that provides coverage for someone’s disability payments.”

When investigating total disability claims, MD&D consultants can assist in several ways.  They typically analyze pre-disability personal and business income tax returns, then identify a claimant’s source of income at the time they’re disabled.

MD&D professionals also assist with reviews of annual income tax returns filed by disability claimants, monitoring for any changes in a person’s income. On-site visits with claimants clarify financial issues that arise in both pre-disability and current incomes.

Disagreements over insurable reimbursement amounts do pop up and forensic accountants provide invaluable assistance in such cases. In fact, in the legal arena, they’re much like detectives – consultants who sift through complex financial data and clues, then use that information to advise attorneys and clients as to facts, pertinent issues, strategy and the strengths and weaknesses in a claimant’s case.

“These cases go to litigation fairly frequently, and when they do, we’re retained as expert witnesses to explain the amount being paid to the claimant,” Tarchala said. “Insurance companies often have their own, in-house accountants who look at this type of information. But bringing in objective experts like us can independently justify an amount being paid for a claim.”

Suzanne Tarchala is the senior manager of Matson, Driscoll & Damico in Detroit.