Like everything else the pandemic touches, the regulatory and legislative actions related to COVID-19 are a work in progress and continue to evolve.

Workers’ Compensation

Presumptive coverage

Governors and state legislatures grappling with how best to protect employees, while balancing the interests of businesses, continue to look to emergency adjustments to the workers’ compensation system to deal with COVID-19. The dominant issue is providing presumption of coverage for COVID-19 so that first responders and health care workers and, in some cases, other essential workers, have unimpeded access to workers’ compensation benefits.

Legislation is pending or has passed in several states, but the laws vary significantly. In some states, the presumption is conclusive, scrapping the basic tenet of workers’ comp that employees must prove they were exposed to the virus during the course of their employment. But in others, the presumption is rebuttable. The trend, which dramatically alters the workers’ comp landscape, is so prevalent that the National Council on Compensation Insurance, (NCCI) tracks this information.

States implementing changes include Alaska, Arkansas, California, Florida, Kentucky, Michigan, Minnesota, Missouri, New Hampshire, New Mexico, North Dakota, Utah, Washington, Wisconsin, and Wyoming. States with legislation pending include Illinois, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, and Vermont. Updated status can be found here.

Not surprisingly, the action with the broadest sweep came from California. On May 6, Governor Gavin Newsom issued an Executive Order making it easier for employees to prove that they contracted COVID-19 at work and thus, get workers’ compensation benefits. While the presumption can be disputed if there is evidence the disease was contracted outside of work, the order effectively makes workers’ comp coverage available to all employees who worked outside their homes from March 19 to July 5 and contracted COVID-19 within two weeks of performing on-the-job duties. It is expected to cost between $600 million on the low end and $2 billion if higher estimates come to fruition, according to the WCIRB.

In Illinois, a significant court challenge compelled the Workers’ Compensation Commission to withdraw a sweeping emergency amendment that would have created a rebuttable presumption that when medical personnel, first responders, and essential employees contracted COVID-19, it was work-related. Both houses of the General Assembly recently passed a more limited bill that was a compromise measure that both businesses and workers’ advocates could live with. It provides death benefits for first responders who were presumably infected with COVID-19 on duty between March 9, 2020 and December 31, 2020 and worker’s compensation benefits for essential workers under certain conditions, but gives businesses a path to rebuttal.

The term “COVID-19 first responder or front-line worker” is defined in the bill as “all individuals employed as police, fire personnel, emergency medical technicians, or paramedics; all individuals employed and considered as first responders; all workers for health care providers, including nursing homes and rehabilitation facilities and home care workers, correction officers, and any individuals employed by essential businesses and operations as defined in Executive Order 2020-10 dated March 20, 2020, as long as individuals employed by essential businesses and operations are required by their employment to encounter members of the general public or to work in employment locations of more than 15 employees. For purposes of this subsection only, an employee’s home or place of residence is not a place of employment, except for home care workers.” Further, COVID-19 claims will not count against employers’ experience modification and premiums.

Employers can rebut claims under certain conditions if they can demonstrate the workplace was following current public health guidelines for two weeks before the employee claims to have contracted the virus; can provide proof that the employee was exposed by another source outside of the workplace; or, the employee was working from home for at least 14 days before the injury claim. Documentation will be critical to support rebuttals. The bill is expected to be signed by the Governor.

Employers and insurers are concerned that these presumption policies will increase insurance costs for employers at a time when businesses are already facing significant financial challenges. In Minnesota, the Senate recently passed a bill which creates a coronavirus relief fund with stipulations that such funds will help local government organizations cover workers’ compensation costs related to COVID-19, among other needs generated by the pandemic.

While few states have extended presumption beyond health care workers and first responders, some have issued warnings about the handling of COVID-19 claims. Recently, the Industrial Commission of Arizona issued a policy statement noting “claim denials related to COVID-19, like any claim denial, must be ‘well-grounded in fact’ and ‘warranted by existing law'” or based upon a good faith argument for the extension, modification, or reversal of existing law.

NCCI: Impact of claims on Experience Mod

In mid-May, NCCI posted Item E-1407 which excludes all COVID-19 claims from Experience Mods. In the early days of the crisis, new claim codes were created specifically for COVID-19 infections that were paid under workers’ compensation. This filing serves to exclude those claims from experience rating (and merit rating). This applies to claims with accident dates of December 1, 2019 and later and there is currently no expiration date for this rule.

This rule has been approved by Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Maine, Maryland, Mississippi, Montana, Nevada, New Hampshire, New Mexico, Oklahoma, South Dakota, Tennessee, Vermont, and West Virginia. Other states are expected to follow suit.

 

Independent states

Pennsylvania

In early May, the Pennsylvania Comp Bureau posted the rules relating to COVID-19, effective 3/1/20 to 12/31/20.

These changes allow for:

• Temporary reclassification to 953 (Clerical) for employees who are now doing clerical work at home during the crisis.
• Exclusion of payroll for wages paid to employees who are performing no services to the employer. This payroll will be assigned to Code 1212.
• Exclusion of COVID-19 claims from Experience Rating.

There was a filing to make changes to the Basic Manual as well as the Statistical Plan.

Delaware

Also in May, Delaware made changes identical to Pennsylvania, effective April 1, 2020.

New York

New York has approved new rules, which differ from other states. According to RC 2512, published 5/1, payroll for employees who are not working at all OR employees who are temporarily reassigned to work at home will have their payroll assigned to the new code 8873. 8873 will carry the same rate as 8810. This means that employees who are being paid to not work WILL have premium applied to them, albeit at the very low 8810 rate.This rule is retroactive to 3/16/20 and applies for 30 days following the lifting of the Stay at Home order.The filing also excludes COVID-19 claims from any future experience rating.

Massachusetts

The Massachusetts Rating Bureau released a statement, “For the time being, we are interpreting Rule V.G. 6 to apply to the COV-19 situation. It states that employees who are not on strike, but are unable to perform their normal duties because of a strike, and they are performing absolutely no work for their employer and are not present on their employer’s premises during this period, such wages shall be assigned to Code 8810 – Clerical Office Employees NOC, provided the facts are clearly disclosed by the employer’s records.”

Minnesota

In Minnesota, the bureau has adopted NCCI’s payroll rules, but has stated that COVID claims WILL BE included on the experience mod.

Michigan

Unlike most states, the Michigan bureau (CAOM) does not file rules on behalf of carriers operating there. The carriers have the option to adopt or not adopt anything. CAOM has approved NCCI’s payroll rules for the Assigned Risk market, but individual carriers will have the option whether to follow this or not.

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