Navigating the Workers’ Compensation System During the COVID-19 Pandemic

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The impact of COVID-19 on the workers’ compensation system, claim handling and employee safety continues to evolve as more is learned about COVID-19 with ongoing updates from Centers for Disease, OSHA, U.S. Department of Health and Human Services, state and local public health departments, and industry publications.

Workers’ Compensation Industry Challenges

Due to stay at home orders, social distancing requirements, sporadic medical clinic closures or limited hours of operation, several WC processes and services have posed some challenges in the industry. A few examples include restricted or limited in-person court appearances and depositions, untimely utilization review, delayed medical treatment, and diminished return to work opportunities due to businesses’ downsizing. Alternative ways of maintaining services have included court proceedings and depositions conducted telephonically, videoconferences, electronic signatures of court papers and as appropriate and available remote health care via telemedicine.

Proposed Legislation Changes

Several states are reviewing regulatory changes to the worker’s compensation system in response to COVID-19.

California Workers’ Compensation Insurance Rating Bureau (WCIRB) submitted a special regulatory filing to the California Insurance Commissioner. California Department of Insurance announced they are hosting a public hearing on May 18, 2020 to hear feedback and testimony on the proposed changes. If approved, by the insurance commissioner these proposed changes include:

  • Excluding claims arising from COVID-19 from experience rating, with accident dates on or after 12/1/2019. The language specifically includes claims that arose because of a diagnosis. The bureau’s reasoning is based on the opinion that WC claims are unlikely to be a strong predictor of future claim costs.
  • Excluding from reported payroll the payments made to those who are being paid while not engaged in work activities. The change would apply during the state’s stay-at-home order and, for up to 30 days after if the employee continues to not work.
  • Temporarily classifying some employees as clerical office workers during California’s stay-at-home order, and up to 60 days after, if the employee still meets the definition of class code 8810.

 National Council on Compensation Insurance (NCCI) response to similar rulings:

  • Experience Rating: NCCI is proposing that claims attributed to the COVID-19 pandemic be excluded from experience rating and will file a rule change for consideration by the state insurance regulators.
  • Reported Payroll: NCCI has recognized the need for an expedited rule change to address payroll for employees who are being paid but are not working, as it relates to the basis of premium. Details of the proposed rule changes will be submitted to state regulators.
  • Class Codes: NCCI recognizes that temporary interruption or suspension of normal business activities caused by COVID-19 may qualify as a change in operations. The employer would be responsible for maintaining separate payroll records for the change in operations or the wages earned for employees whose occupation has changed.

Expanding Workers’ Compensation Benefits: Emergency Presumption

Several governors and state regulators have issued executive orders or amended rules to broaden eligibility regarding the diagnosis of COVID-19 as a presumptively compensable claim among certain workers. Most of these rulings include healthcare workers and first responders. However, a few states have expanded the presumption to include additional front-line essential workers, i.e. grocery stores, banks, hardware stores, laundries, domestic violence shelters, among other businesses.

Presumption bills continue to be reviewed and introduced to several state legislatures across the nation, including California whose legislators have introduced AB 664 which would allow a conclusive presumption for police, firefighters, and some hospital staff. If the bill is passed, California and Alaska would be the two states first to adopt conclusive presumptions.

Federal Compensation Fund Proposal

Former Chair of the New York Workers’ Compensation Board proposed a federal fund to provide death benefits for frontline workers impacted by coronavirus. Governor Andrew Cuomo stated that the state’s congressional delegation is working on this proposal.

Workers’ Compensation Claims

If an employee alleges correlation of a COVID-19 exposure to their employment, the employer should report the claim to their WC carrier or TPA. Claims will be evaluated for coverage on a case by case basis. Based on the facts of each case, the claims team in each jurisdiction will investigate and determine compensability ( note: WC provides benefits to employees for occupational injuries and illnesses that arise out of and occurred during the course and scope of employment, referred to as AOE/COE).

Many claim administrators have set up protocols for handling COVID-19 cases, including additional questions the adjusters will likely ask as part of their AOE/COE investigation. These questions are designed to obtain the kind of information necessary to evaluate compensability of the claim. The adjusters will also likely ask additional questions of the medical provider to best determine the cause of the virus. The challenge for medical providers will be to identify the primary causation or source of how the employee was infected since COVID-19 has been declared a Pandemic that is running through the general population.

The World Insurance Organization has approved a new injury description code for reporting COVID-19 claims, named Pandemic code 83.

Employee Safety

OSHA has issued several new directives to keep workers safe and employers accountable to provide a safe and healthy workplace, including issuing a reminder to employers that it is illegal to retaliate against employees who report unsafe working conditions.

OSHA and the Centers for Disease and Prevention (CDC) have posted guidelines and posters for keeping employees safe during the virus outbreak:

Interim guidance for implementing safety practices for critical infrastructure worker who may have had exposure to a person with suspected or confirmed COVID-19, via the CDC website.

Ten Steps Workplaces Can Take to Reduce Risk of Exposure to Coronavirus: PDF

Prevent Worker Exposure to Coronavirus: PDF

Note: EEOC website states: “Employers should remember that guidance from public health authorities is likely to change as the COVID-19 pandemic evolves. Therefore, employers should continue to follow the most current information on maintaining workplace safety.”

References:

Workcomp Central Publication: https://www.workcompcentral.com/ ,

National Council on Compensation Insurance: https://www.ncci.com/Articles/Pages/Insights-Coronavirus-FAQs.aspx

California Department of Industrial Relations: https://www.dir.ca.gov/

Centers for Disease and Prevention: https://www.cdc.gov/

OSHA: https://www.osha.gov/

U.S. Equal Employment Opportunity Commission: https://www.eeoc.gov/

Disclaimer:  The information provided herein is for informational, educational and discussion purposes only and shall serve solely as a resource to be used together with your ABD professional insurance advisors in making risk management decisions.  While ABD endeavors to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the information contained in this document.   The information provided herein does not constitute professional advice, nor does ABD provide professional advice beyond our current or prospective broker-client relationship. If you have legal, tax or financial planning questions, we advise you to contact a licensed professional.  If any actions or decisions are made based solely on the information provided herein without consultation with a licensed professional, you do so at your own risk and ABD shall have no liability resulting from such action or decisions.

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