Things you should know

NCCI’s 2020 Regulatory and Legislative Trends Report

In addition to a comprehensive review of the activity in more than 20 states to address workers’ compensation presumptions of compensability in response to the COVID-19 pandemic, NCCI’s 2020 Regulatory and Legislative Trends Report provides an overview of actions by state legislatures, governors, and regulators (through July 31, 2020) to address workers’ compensation insurance.

Key subjects include:

  • Workplace-related mental injuries
  • Legalization of marijuana
  • Reimbursement for medical marijuana
  • Single-payer health insurance
  • Employee vs. independent contractor determinations
  • Court cases impacting workers’ compensation
  • Law-only filings in 2020
  • Average approved changes in loss costs and rates

Mega claims (over $3M) on the rise

According to a new study by 10 rating agencies of workers’ compensation claims from 2001 through 2017, during the Great Recession the rate of mega claims declined sharply, with the fall in construction employment, but they have consistently increased since 2013.

While the construction sector makes up less than 20 percent of all workers’ compensation claims, it accounts for over 40 percent of mega claims. Motor vehicle accidents give rise to 20 percent of mega claims and 30 percent of claims with more than $10 million in incurred losses, but represent less than 5 percent of all indemnity claim.

Mega claims comprise a relatively small percentage (0.04%) of all indemnity claims in workers’ compensation, but add $1 billion to $2 billion in losses every year. The largest share are in California and New York.

The good news is that insurers are identifying the potential for such claims much quicker than in the past with analytical models. However, it still takes time to breach the $3 million threshold. Less than one-half of mega claims reach the $3 million threshold by 18 months from policy inception, and less than 90% reach that threshold by 126 months from policy inception.

Labor Department issues guidance on tracking employees’ teleworking hours

Although the new Field Assistance Bulletin addresses employers’ obligations under the Fair Labor Standards Act (FLSA) for remote work that has skyrocketed during COVID-19, it applies to all other telework or remote work arrangements.

NLRB upholds company’s moonlighting ban

In Nicholson Terminal & Dock Co., the National Labor Relations Board (NLRB) upheld the company’s “moonlighting” policy that prohibited employees from having another job that could be inconsistent with the company’s interest, have a detrimental impact on the Company’s image with customers or the public, and could require devoting such time and effort that the employee’s work would be adversely affected. It also noted that employees are expected to devote their primary work efforts to the company’s business.

New safety resource for construction industry from ASSP

State News

The American Society of Safety Professionals (ASSP) has launched a new library of construction safety resources.

California

  • The Workers Compensation Insurance Rating Bureau’s governing committee voted to recommend a 2.6% increase in pure premium advisory rates in the state over last year. Had it not been for the expected impact of COVID-19, there would have been a recommended a rate decrease for 2021 of 1.3%. If approved, it will be the first increase since Nov.2014.
  • The Workers’ Compensation Institute released an online application to support interactive analyses and comparisons of COVID-19 and non-COVID-19 claims.
  • The Division of Workers’ Compensation (DWC) has posted an order adopting regulations to update the evidence-based treatment guidelines of the Medical Treatment Utilization Schedule (MTUS).

Minnesota

  • The Department of Labor and Industry has pushed back the launch of a new electronic claims management system, known as Work Comp Campus, to Nov. 2 to give stakeholders more time to prepare.
  • The Department of Labor and Industry has updated the state’s medical fee schedule conversion factors to keep up with inflation.

New York

  • The Workers’ Compensation Board adopted a new rule that applies to reimbursement codes and values for COVID-19 testing when a workers’ comp claim has been filed or when testing is part of a pre-operative protocol in keeping with health department guideline. The Board also published an emergency rule, allowing telemedicine technology to be used in emergency settings.
  • The Board reminded stakeholders that the switch to a more robust claims data reporting standard, EFI 3.1, is coming next spring, and testing will begin in November. Webinars on the electronic submission system are being held on the third Tuesday of each month.

North Carolina

  • The Industrial Commission’s Rules Review Committee approved technical corrections to a temporary mediation rule. The rule no longer requires parties to attend mediations in person but allows for the use of technology to facilitate a remote meeting.
  • Registration for the Workers’ Compensation Educational Conference, to be held online Oct. 13-16, is now open.

Pennsylvania

Tennessee

  • Registration for the Bureau of Workers’ Compensation Educational Conference to be held virtually Oct. 26 – 30 is open.

Virginia

  • The Corporation Commission will hold a public hearing in October on NCCI’s proposal to cut average loss costs by more than 20% for the voluntary market.

HR Tip: New York federal court decision overturning provisions of FFCRA creates uncertainty for employers

Shortly after the regulations for the Families First Coronavirus Response Act (FFCRA) were issued, the State of New York sued the DOL, claiming that the agency unlawfully denied leave to otherwise eligible employees and exceeded their statutory authority in drafting the final regulations. The court decision, issued on August 3, invalidated four of the regulations:

  • The DOL’s requirement that FFCRA leave is available only when there is work available and employees can be denied leave under certain circumstances if there is no work available
  • The definition of healthcare providers under a provision that excludes healthcare providers from having to provide leave benefits is too broad
  • The requirement that employees obtain consent from the employer for intermittent leave for certain reasons
  • The requirement that documentation supporting the need for FFCRA leave is required before an employee takes FFCRA leave

While the decision clearly applies to employers within the court’s jurisdiction (Manhattan and the Bronx in New York City and Westchester, Rockland, Putnam, Orange, Dutchess, and Sullivan counties in New York state), its applicability elsewhere, particularly in other states, is unclear. In light of this ruling, the DOL has issued revised regulations. The revised rule clarifies workers’ rights and employers’ responsibilities regarding FFCRA paid leave.

New guidance from EEOC on opioid addiction plus drug testing trends in age of COVID-19

EEOC issues two new technical bulletins

Amid the pandemic, there have been reports of increased drug use and fatal opioid overdoses. Isolation, uncertain job security, family distractions, and a lack of access to traditional support networks present unique challenges for employees who battle with substance abuse.

On August 5, the EEOC issued two technical bulletins on accommodation issues under the Americans with Disabilities Act (ADA) for employees who use opioid medications or may be addicted to opioids. Although the bulletins were created for employees and healthcare providers and do not provide new information (the stated purpose is to provide clarity), they do provide valuable insights to employers when dealing with an employee who legally uses opioids.

Use of Codeine, Oxycodone, and Other Opioids: Information for Employees,” makes clear that current illegal drug use is not a covered disability and clarifies that individuals who are lawfully using opioid medication, are in treatment for opioid addiction and are receiving Medication Assisted Treatment (MAT), or have recovered from their addiction, are protected from disability discrimination. Also, the document answers questions about reasonable accommodations that may be available to employees who legally use opioids, as well as what to do if an employer has concerns about the employee’s ability to safely perform his or her job.

Employers must allow employees to provide information about lawful opioid use, determine if there is a way to do the job safely and effectively with reasonable accommodation, document safety risks, provide accommodations to recovered employees, such as flex time to attend support meetings, and don’t automatically disqualify job applicants if they are in a treatment program.

The second document, “How Health Care Providers Can Help Current and Former Patients Who Have Used Opioids Stay Employed” informs health care providers about their patients’ legal rights in the workplace. When employees who use opioids qualify as individuals with disabilities under the ADA, it could be necessary for employers to interact with their health care providers to determine whether a reasonable accommodation would enable the employee to do the job without risk of substantial harm to themselves or others. Besides describing the coverage limits under the ADA, the document outlines the types of information employers may need to decide whether the employee has an ADA disability and requires a reasonable accommodation.

Drug testing trends

Even before the pandemic hit, workforce drug testing positivity rates were climbing, reaching a 16 year high in 2019. In its annual drug testing index, Quest Diagnostics Inc. found positivity rates in the combined U.S. workforce increased in urine drug tests, climbed to 4.5%, the highest level since 2003. In the general U.S. workforce, marijuana positivity grew from 2.8% in 2018 to 3.1% in 2019 – an overall surge of 29% since 2015, according to Quest’s data.

In addition to overall increases in workforce drug positives, specific regions of the United States, particularly the Midwest, experienced dramatic increases in positivity for cocaine and methamphetamine, as well as marijuana. For an interactive map with positivity rates and trend lines by three-digit zip code in the United States, visit DTIDrugMap.com.

The analysis of overall drug use also found that in the first few months of 2020, drug deaths increased about 13% compared with last year, “attributable partly to social isolation and other disruptions caused by COVID-19. “Retail Trade had the highest overall positivity rate and Accommodations and Food Services had the highest workforce positivity for marijuana.

There is concern that the stress and anxieties associated with the pandemic will push these numbers even higher. In many states where marijuana is legal, sales have reached record highs during the pandemic. In the press release regarding the report, Dr. Barry Sample, senior director of science and technology at Quest Diagnostics notes, “There is no question that before COVID-19, rates of workplace drug positivity were trending in the wrong direction, based on our Quest Diagnostics data. The enormous strain caused by COVID-19 may prove to be an accelerant on this disturbing trend. Organizations will need to consider the impact of COVID-19 not only on workplace safety but also as a health concern for their employees for some time to come.”

While the industry has done a good job in reducing opioid prescriptions for injured workers – the share of all workers comp claims receiving opioids declined from 55% in 2012 to 34% in 2018 according to NCCI, employers should not relax their vigilance about prescribing behaviors during the pandemic. A recent comprehensive review of 13 studies with more than 13 million participants with musculoskeletal disorders (MSDs) funded by the National Safety Council (NSC) and published by McMaster University in Hamilton, Ontario, found that musculoskeletal disorders can be treated more effectively by medications and therapies other than opioids.

Yet, the difficult logistics of drug screening during the pandemic has led some employers to forgo pre-employment drug testing or postpone to a later date, if it’s allowed under state law. Still others have used mobile testing services, rather than a clinic.

Some employees refuse to report for a drug test based on COVID-19 concerns. Determining if this is truthful or a way to avoid being tested is tricky. It’s important to have a plan and a refusal to test policy. Drug testing may require new rules and new precautions that need to be communicated to those being tested. Further, if a drug test is positive employers should ask for an explanation to ensure compliance with the ADA.

For companies regulated by the Department of Transportation (DOT), staying abreast of the changing notices is key.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Workers’ Compensation and COVID-19: Regulatory, legislative, and guidance updates, trends in claims and lawsuits

Regulatory, legislative, and guidance updates – federal

Expansion of the federal Public Safety Officers’ Benefits Program (PSOB)

The new act, Safeguarding America’s First Responders Act of 2020, creates a general presumption that a public safety officer who dies or becomes permanently disabled from COVID-19 or related complications sustained a personal injury in the line of duty. It extends the benefit payments of PSOB, a one-time lump sum payment of $359,316 and/or monthly education assistance of $1,224, to the children or spouse of a deceased or permanently disabled first responder.

While the program already covers infectious diseases, the difficulty of proofing the virus was contracted on the job made it difficult to receive benefits. President Donald Trump signed the law on August 14 and the presumption runs from Jan. 1, 2020 through December 31, 2021. It will require diagnosis or evidence that the officer had the virus at the time of death and that the diagnosis came within 45 days of their last day on the job.

Executive order makes permanent telehealth rules, excluding PT

The expansion of telehealth services in workers’ compensation beyond the pandemic got a boost from an executive order that makes permanent an emergency funding measure, which temporarily waived restrictions on 135 services delivered by telehealth to Medicare beneficiaries. The order is of particular interest to Texas and other states that tie workers’ comp medical fees to the methodologies and values used by Medicare.

Although this was lauded as an acceptance of telemedicine, many were disappointed it did not permanently include physical therapy and rehabilitation as telehealth services. Since therapists are not listed as eligible telehealth providers in the federal Social Security Act law that governs Medicare, the Centers for Medicare and Medicaid (CMS) concluded it did not have the authority to do so.

Public comments are due by October 5 on the proposed rules .

CDC: Guidance for employers on COVID-19 case investigation, contact tracing, workplace violence in retail, and more

In the guidance, Case Investigation and Contact Tracing in Non-healthcare Workplaces: Information for Employers, the CDC notes, “Quick and coordinated actions, including case investigation and contact tracing, may lower the need for business closures to prevent the spread of the disease.” It offers tips on how employers can partner with health departments and work with their employees to control the spread of the virus.

Intended for use by employers and employees in retail, services, and other customer-based businesses, Limiting Workplace Violence Associated with COVID-19 Prevention Policies in Retail and Services Businesses, offers strategies to limit violence towards workers that may occur when businesses put in place policies and practices to help minimize the spread of COVID-19 among employees and customers.

Other new guidance relates to testing, schools, pediatric patients, laboratory personnel, veterinary clinics, and transit station workers.

For OSHA updates, see the OSHA Watch section.

Regulatory, legislative, and guidance updates – state

Georgia joined several other states in enacting a law, the Georgia COVID-19 Pandemic Business Safety Act, designed to protect healthcare facilities, businesses, and other entities from civil liability related to the spread of COVID-19, except in limited situations where there is a showing of gross negligence or intentional misconduct. The law went into effect August 5, 2020 and extends to July 14, 2021.

Nevada passed legislation that provides immunity to certain businesses, governmental entities, and nonprofits from civil liability for personal injury or death resulting from exposure to COVID-19 as long as they adhere to requirements promulgated by local, state, and federal agencies, and refrain from acting in a grossly negligent manner. It is retroactive to March 12, 2020 and expires on July 1, 2023. Notably, public-school entities (including preschools, K-12, charter, and private schools), as well as hospitals and other healthcare providers, were specifically precluded from liability protections.

The legislation also imposed additional mitigation requirements for public accommodation facilities in Las Vegas and several other areas of the state, directing the Director of the Department of Health and Human Services to adopt regulations requiring public accommodation facilities to limit the transmission of COVID-19. A “public accommodation facility” is defined as a hotel and casino, resort, hotel, motel, hostel, bed and breakfast facility, or other facility offering rooms or areas to the public for monetary compensation or other financial consideration on an hourly, daily, or weekly basis. The legislation also authorizes the Nevada Gaming Control Board to require casinos under its domain to submit written copies of its COVID-19 prevention protocols.

The New Mexico Environment Department filed an emergency amendment to require employers to disclose positive COVID-19 cases among their employees to the state within four hours of being notified of the test results.

The New York State Workers’ Compensation Board adopted a new rule that applies to reimbursement codes and values for COVID-19 testing when a workers’ comp claim has been filed or when testing is part of a pre-operative protocol in keeping with health department guideline.

The Board also published an emergency rule allowing telemedicine technology to be used in emergency settings. Reimbursement already had been authorized for many other medical services in the state. Because it was adopted on an emergency basis, without the public comment period, the rule will expire on Oct. 18.

The Pennsylvania Department of Health issued a new order requiring the development and implementation of policies and procedures related to the distribution of personal protective equipment, specifically N95 masks, for direct care workers in long-term care facilities. Under the new order, nursing homes, personal care centers, assisted living homes and private intermediate care facilities must develop and implement policies for obtaining and distributing personal protective equipment.

The Tennessee COVID-19 Recovery Act was enacted, providing broad protection to individuals and businesses from claims arising from COVID-19 unless there is clear and convincing evidence of gross negligence or willful misconduct. Health care professionals and facilities, businesses, non-profits, religious organizations, public institutions of higher learning, and all other individuals and legal entities are protected from liability under the Act.

A bill that would have made COVID-19 an occupational illness failed in Tennessee’s Senate Commerce and Labor Committee.

Texas became the final NCCI state to officially approve NCCI’s payroll rules relating to paid furlough due to COVID-19 and allowing for reclassification of employees who have changed jobs and are working from home.

Claims: a potpourri of approaches but higher denial rates than other claims

While claim data by state is limited, claims are being handled differently in different states.

Moreover, some businesses are encouraging sick or quarantined workers to use paid time off or have kept paying salaries to avoid claims, feeling it is better to assist virus-stricken employees than create an adversarial situation. Yet, denial rates are relatively high.

The Division of Workers’ Compensation in Florida reports a denial rate of about 46% of the 5,693 claims that had been filed as of the end of June. In Georgia, 44% of the 1,827 claims have been denied as well as almost two-thirds of claims in Colorado (1,200 of 1,923). Of the 11 fatality claims in Colorado, only one has been accepted. First responders and health care workers who contract COVID-19 at work may be eligible for workers’ compensation benefits under Florida law, but the other states mentioned do not have presumption for COVID-19 exposure.

Through July, COVID-19 claims represented 10.2% (31,612) of all California injury claims. This number is projected to grow to about 56,000 since there are time lags in filing, reporting, and recording. Claims include 140 death claims, up from 66 reported as of July 6.

Health care workers continue to account for the largest share of California’s COVID-19 claims, filing 38.7% of the claims recorded for the first seven months of this year, followed by public safety/government workers, who accounted for 15.8% of COVID-19 claims. These were followed by retail trade (7.9%), manufacturing (7.0%), and transportation (4.7%), according to the analysis.

California’s executive order of presumption was retroactive to March 19, 2020 and extended through July 5, 2020.

In Pennsylvania, there were 5,354 initial workers’ compensation claims received between March 11 and August 7 that were related to COVID-19, according to the state Department of Labor and Industry. Virginia reports over 6,300 claims as of mid-August, most of which are still pending. Ninety-four have been denied.

During a recent webinar, Health Strategy Associates’ Joe Paduda and Bickmore Actuarial’s Mark Priven, noted FAIR Health, a medical data firm, reported that the median hospital charges for COVID patients, for most age groups, were less than $40,000. The median allowed amount of reimbursement was about $20,000. Further, a recent survey of third-party administrators and insurers shows that most virus claims cost less than $3,500 for medical and indemnity. The costs are driven by just four percent of the claims.

Lawsuits on the rise

According to the employment and labor law firm Fisher Phillips LLC, 319 lawsuits relating to COVID-19 were filed in July, up from 122 in June. As of August 25, there were 532 cases. California leads all states with 100 filings, followed by New Jersey (60), Florida (54), Texas (39), New York (37), Ohio (25), and Illinois (21). Many of the cases involve workers claiming unsafe or unsanitary work conditions or retaliation. Some lawyers speculate that employees may feel it is difficult to win their comp claims and turn to lawsuits. Work comp accounts for only about 15% of the P&C claims related to the virus.

Also emerging are third party suits from family members, alleging wrongful death of a loved one or spreading of the virus to family members, because employers failed to keep employees safe.

new NCCI report compiles some recent COVID-19 workers’ comp lawsuits. While the cases are still pending, they provide a glimpse into the type of behavior and policies that lead workers to sue during the COVID-19 pandemic. Given the common theme of employee safety, the best way for employers to protect themselves from litigation is to follow and enforce public health and OSHA guidelines, provide adequate protective equipment and training, and carefully communicate all protocols. Make the focus of communication the well-being of employees, not production. Steep jury awards are common in emotional cases and there is much emotion surrounding COVID-19, so take steps to avoid going to trial.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com