COVID-19 Impact on Workers' Compensation Insurance
State Laws Determine Whether Workers Are Covered For COVID-19
The COVID-19 pandemic has raised various issues related to workers’ compensation insurance. One question is whether benefits should be afforded to essential workers like firefighters, police officers, physicians, nurses, and grocery clerks. These individuals have an increased risk of contracting COVID-19 on the job because they regularly interact with people who are or may be infected with the coronavirus. Because essential workers serve the public, many states in the U.S. have extended or are considering extending workers’ compensation benefits to those who acquire COVID-19 in the course of their work.
States With COVID-19 Laws
As of Sept. 15, 2020, 21 states had laws or executive orders that extend workers’ compensation coverage to certain workers infected with the coronavirus. Eleven states and the federal government had bills pending to extend benefits.
The National Council on Compensation Insurance (NCCI) maintains an updated list of all state laws, executive orders, and pending bills that provide benefits to workers who contract COVID-19 on the job.
Coronavirus-related laws and executive orders vary from state to state. Some, like New Hampshire's Emergency Order #53, apply only to first responders (police, firefighters, paramedics, etc.). Others extend coverage to a broad range of frontline workers. An example is Illinois' law HB2455, which covers first responders, health care workers, and individuals employed by grocery stores, banks, gas stations, educational institutions, and other essential businesses that employ more than 15 workers.
Rebuttable Presumption of Coverage
Most of the COVID-19 laws and emergency orders establish a ‘rebuttable presumption of coverage.’ This means that workers infected with COVID-19 are presumed to have acquired the disease on the job unless the employer provides evidence to the contrary.
Employers can rebut the presumption by proving that workers contracted the virus outside the workplace. For their argument to be successful, employers must cite one of the reasons specified in their state's COVID-19 law or executive order. For example, an employer in Illinois could demonstrate that the employee was working from home at the time they were infected or that they were exposed to the virus at a family gathering.
A presumption of coverage can expedite the delivery of benefits to essential workers and streamline the claims process.
COVID-19 laws and executive orders outline procedures that infected workers must follow to obtain benefits. For instance, under California's Executive Order N-62-20, an employee is presumed to have contracted COVID-19 at work if they have tested positive for or been diagnosed with COVID-19 within 14 days after performing work at the employer’s workplace. The worker must have been diagnosed with a COVID-19-related illness by a physician and the diagnosis must be confirmed by a positive test within 30 days of the date of the diagnosis.
States Without COVID-19 Laws
Suppose you operate your business in a state that does not have a law or executive order extending workers’ compensation benefits to employees who contract COVID-19 on the job. If an employee becomes infected with the coronavirus and files a workers’ compensation claim, will the claim be covered by your workers’ comp policy? The answer is likely no.
State workers’ compensation laws provide benefits to workers injured on the job due to an accident or occupational disease. State laws determine the types of diseases that are covered.
Some laws limit coverage to diseases that arise out of risks peculiar to the worker's occupation. Many exclude ordinary diseases of life, meaning diseases workers can contract on or off the job.
COVID-19 is an infectious disease that an individual can acquire from co-workers, friends, family members, or virtually anyone else who's infected with the virus. Unless the law states otherwise, COVID-19 won't qualify as an occupational disease.
Employees Paid But Not Working
Another issue associated with the COVID-19 pandemic has to do with payroll. When state and local governments issued stay-at-home orders, many businesses continued paying wages to employees who weren't actually working. Now, some employers are wondering whether those wages will be included in the calculation of their workers’ compensation premium. In many states, the answer is no.
The NCCI has filed a new rule stating that payroll for non-working employees will not be used to calculate workers’ comp premiums. The new rule has been filed in all 36 states where the NCCI serves as the rating bureau. Some independent states, such as Pennsylvania, have issued similar rules.
Employees Fulfilling Different Roles
The pandemic has forced many small businesses to alter or reduce their operations and to assign workers new or different tasks. Do workers need to be reclassified if their job duties have been modified? According to the NCCI, the answer depends on whether either of the following has changed:
- The nature of the employer's business
- The employee’s occupation for the employer
For instance, suppose a small chain of retail stores has closed its showrooms due to the pandemic. The business owner asks half the showroom employees to drive delivery vans and the other half to perform clerical work from home. In this case, both groups of workers would need to be reclassified because their new job descriptions place them in different class codes. The clerical workers would be reassigned Code 8871 (Clerical Telecommuter Employees) and the drivers would be reassigned to Code 7380 (Drivers, Chauffeurs, Messengers, and Their Helpers NOC—Commercial). Once the workers returned to their former roles, they would be placed back into their original classifications.