Photo courtesy of California Chamber of Commerce
Workers’ comp and Covid-19 have a very complicated relationship. While filing for workers’ comp when you have experienced “long Covid” has technically become easier for some, the bottom line is that the process will depend entirely on your job and where you live – and the rules could change at any minute.
At a baseline level, Covid-19 claims are very difficult simply due to the virus’ transmission style. Given it can be contracted so easily, it’s inherently difficult to prove that an employee caught it at work. Historically, workers’ compensation has strayed away from community-spread illnesses, for example it doesn’t cover a cold or the flu, exactly because they are so hard to tie back to the workplace. Some states have made moves in that direction, especially with regards to chronic illnesses that stem from repeated exposure to harmful environments or materials. For example, the National Council on Compensation Insurance reports that, prior to the Covid-19 pandemic, at least 19 states had policies that covered firefighters, and other first responders, who developed lung and respiratory illnesses under the presumption that these illnesses were work-related. Several key aspects of Covid-19 set it apart, however.
For one, the pandemic has essentially made the majority of jobs hazardous that were not considered so before. Health care workers, transit operators, hospitality workers, and more are all considered frontline, essential workers. Despite certain jobs holding more risks of Covid-19, workers’ compensation in most states does not guarantee that the virus will be covered just because of someone’s job. Secondly, the timeline of claim filings has changed drastically. Many individuals who have contracted Covid-19 generally file the initial claim form months down the line in cases where their symptoms don’t present severely at first but then remain constant over a long period of time ~ which is what has been deemed “long covid.” Conversely, those who are hospitalized, and fall very ill with Covid-19, don’t end up filing because they either don’t know that they can receive workers’ compensation, don’t know how to apply, or are too sick to engage in the process. According to Liberty Mutual, a more extended investigation is needed in order to decide whether such a claim can be accepted, which can greatly derail the traditional timeline. Lastly, Covid-19 cases change the manner in which individuals interact with the workers’ compensation system once they have entered it. Max Koonce, the chief claims officer for Sedgwick Claims Management Services, explains that the “vast majority of claims are really muscular type injuries… which have a very established protocol as to how they’re treated; they have evidence-based medicine guidelines that they use, so you have a pretty good idea of the way the claim is going to go as far as with medical treatment.” In contrast, Covid-19’s varying symptoms, duration, and treatment complicate the matter – not to mention the anomaly of “long Covid.”
The result has been very different outcomes for workers’ compensation. Here is a look at the numbers. In 2020, NCCI’s State of the Line report found that workers filed over 45,000 Covid-19-related claims. In early 2021, a significant number of Covid-19 workers’ compensation claims were reported to be denied, even in states that had a presumption of eligibility; in Texas, which has no presumption, insurers denied 45% of Covid-19 related claims; in California and Florida, which do have a presumption law, over 20% of cases were denied respectively. Jeff Eddinger, NCCI’s senior division executive, found that the vast majority of Covid-19-related claims were very small, given workers often did not require hospitalization. Quantitatively, NCCI found that only 1% of claims turned into expensive claims (climbing to over $100,000) which were primarily cases of “long Covid;” the caveat is that those 1% of claims accounted for 60% of the total payouts.
The bottom line is that workers’ compensation rules depend, and vary dramatically based, on the state. The National Conference of State Legislatures explains that states apply varying coverage requirements and standards based on industry, occupation, and the size and structure of a business, though most have a dedicated court system for workers’ compensation where judges are the final decision-makers. The NCSL has found that, currently, 17 states and Puerto Rico have taken action to extend workers compensation coverage to include COVID-19 as a work-related illness. The NCSL provides a more in-depth look at what states have been taking action:
- 9 have legislation creating a presumption of coverage for various worker groups;
- 3 (Minnesota, Utah and Wisconsin) only limit coverage for first responders and health care workers;
- 3 (Illinois, New Jersey and Vermont) only cover essential workers;
- 2 (California and Wyoming) cover all workers;
- 4 have executive branch authority to implement presumption policies for first responders and health care workers;
- And 4 (including California and Kentucky) have already taken executive action to provide coverage to other groups of essential workers, such as grocery store employees.
These laws have, in effect, made it technically easier for workers to file for workers’ compensation, however the NCSL has been vocal about how the presumption has affected employers. According to the association, “this presumption places the burden on the employer and insurer to prove that the infection was not work-related making it easier for those workers to file successful claims… [and] some employers and insurers have raised concerns that these presumption policies will increase insurance costs for employers at a time when businesses are already facing significant financial challenges.”
As of now, the future looks uncertain. Some, like Eddinger, believe that “even though there are some claims that ended up being very expensive, because there’s so few of them, [he] wouldn’t expect there to be a measurable impact on the total workers’ comp system costs.” Others, however, think that there is always a chance for Covid-19 claims to get bigger as long as cases continue to develop. The Workers’ Compensation Insurance Rating Bureau of California recently examined the potential cost impact of a growing number of “long Covid” patients; it found that “presuming employees contracted COVID at work could cost the industry $1.2 billion in workers’ comp claims.” NCCI conducted its own research last year on the matter and found that “carriers reported $260 million in total COVID-19 incurred losses.”
Overall it is clear that the uncertainty of Covid-19 will not only continue to affect workers struggling to get the help they need, but also holds the potential to drastically change the future of the workers’ compensation policy landscape and the manner in which it will treat community-spread illnesses.
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