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    Cost of COVID: Tip of an Iceberg

    • Published
    • 20 October 2021
    • Category
    • General

    WorkCare’s Chief Innovation Officer Dr. Anthony Harris will be talking about the cost of COVID-19 for employers on Nov. 3 during WorkCare’s monthly webinar on Trending Beyond COVID-19. (Register here for the free series.)

    In preparation for the webinar, we’ve compiled some studies to illustrate how a consistent, comprehensive approach to COVID-19 disease prevention and management in the workplace can help reduce potentially costly consequences for employers, employees and all Americans.

    Lost Productivity

    COVID-related lost work time is estimated to cost U.S. employers $50.5 billion in lost productivity, according to an analysis conducted by the Integrated Benefits Institute (IBI). This represents a 117 percent increase in comparison to an IBI analysis conducted last year that used a high-range scenario of 15 million cases of COVID-19; the number of cases has more than doubled since then. IBI’s assessment includes potential sick leave wages, short-term disability payments and spending on employee benefits.

    Workers’ Compensation

     In a June 2021 report, the National Council on Compensation Insurance cites $260 million in case-incurred COVID-19 workers’ compensation losses (excluding self-insured companies) for the accident year 2020 in jurisdictions where it provides ratemaking services. The council estimates that COVID-19 claims have the potential to result in losses exceeding $500 million for non-self-insured companies in the jurisdictions it serves.

    A study published by Mitchell found that average medical costs for COVID-19 workers’ compensation claims were $2,400 while indemnity costs averaged $7,400. Health care workers had six times more claims than any other sector. The data suggests that most cases involved time off from work while infectious but not hospitalization.

    Milliman published a paper in September 2021 that estimates costs to the workers’ compensation system for adverse reactions to employer-mandated COVID-19 vaccination. Estimated losses vary from $25 million to $223 million depending on assumptions used for cost analysis. Researchers determined that cost savings could be achieved when employers require vaccination because there would be fewer cases, fewer work absences and lower hospitalization rates.


     Parties to lawsuits incur variable costs. Plaintiffs’ lawyers are filing suits on behalf of employees claiming COVID-related violations of workplace safety and health regulations, privacy laws, and wage-and-hour rules, as well as wrongful death, employment discrimination and other complaints, according to news reports.

    Fisher Phillips’ COVID-19 litigation tracker features a U.S. map denoting COVID-related lawsuits. Most of the 3,717 cases filed as of Oct. 13, 2021, involve remote work and leave conflicts. In August, vaccination-related claims accounted for less than 5 percent of employment-related lawsuits; that percentage is expected to increase in response to vaccine mandates.

    Employment Rights

    The federal Equal Employment Opportunity Commission (EEOC) reports it secured $439.2 million for victims of discrimination in the private sector and state and local government workplaces through voluntary resolutions and litigation in the fiscal year 2020. COVID-related claims are included in this mix. In a press release, EEOC Chair Charlotte Burrow said: “The pandemic is not only a public health crisis and an economic crisis – it’s also a civil rights crisis. COVID-19 and its economic fallout is disproportionately impacting people of color, women, older workers, individuals with disabilities, and other vulnerable workers, and that impact has serious implications in the workplace.”

    In its COVID-related guidance, the EEOC recognizes that “long COVID” (persistent symptoms after infection) may be a disability under the Americans with Disabilities Act (ADA). In an Oct. 13, 2021, update, the agency found that federal laws “do not prevent an employer from requiring all employees physically entering a workplace to be fully vaccinated against COVID-19,” subject to provisions of the ADA. Diagnostic testing is also permitted in the workplace as long as it is equally applied and allows for reasonable accommodations. The EEOC doesn’t specifically address the cost of COVID-19 tests, but employers may be required to pay for them under the agency’s guidance. Vaccines are free.

     OSHA Violations

     In response to inspections, the federal Occupational Safety and Health Administration (OSHA) issued a total of $4,034,288 in coronavirus-related penalties as of Oct. 15, 2021. Penalties totaled about $1.2 million in the first year of the pandemic. Examples of citations include failure to implement a written respiratory protection program, provide a medical evaluation or respirator fit test, report an injury or fatality, or comply with the general duty clause that protects workers from harm. Refer to OSHA’s COVID-19 Response Summary for details on enforcement actions. States with their own occupational health and safety agencies report citations and other data separately.

    Health Care

     In a review of implications for businesses, McKinsey & Company notes that poor health in working populations is a cause for concern:

    • Poor health is estimated to cost the U.S. economy about $3.2 trillion annually from premature deaths and lost productivity.
    • Compared to peer countries, the U.S. has a 46 to 50 percent higher disease burden rate for 20- to 40-year-old workers, and a 17 to 33 percent higher disease burden rate for those over 40 years old.
    • Senior executives are being urged to make a personal commitment to improving access to mental health services through employee assistance and other workplace programs.

    In a review of U.S. Census Bureau Household Pulse Survey data, the Centers for Disease Control and Prevention (CDC) found significant increases in symptoms of anxiety and depressive disorders among adults, with the largest increases among adults 18 to 29 years old and all adults with less than a high school education. Untreated anxiety and depression are associated with work absence, accidents and injuries, disability and poorer quality of life.

    Meanwhile, employer medical costs are projected to increase 6.5 percent in 2022, primarily attributed to increased use of medical services, higher-acuity patients and digital investments, according to an annual report published by PricewaterhouseCoopers. Healthcare Finance News reports other cost inflators for employers include the need for preparedness planning; improvements in information security and technology; equipment replacement and capital investments; salaries and benefits to attract and retain talent (e.g., replace essential workers who have left their jobs); and other tall orders such as addressing health care delivery inequities and overcoming supply chain shortages.


     Reuters reports that many insurers are attempting to reduce COVID-19-related exposure risk by adding restrictions to new or renewed policies, in turn increasing premium rates and other cost burdens for employers, according to Jason Binette, EPLI product manager at AmTrust Exec.

     Hidden Costs

    Some costs are not apparent. Here are a few examples:

    1. The Hidden U.S. COVID-19 Pandemic: Orphaned Children – More than 140,000 U.S. Children Lost a Primary or Secondary Caregiver Due to the COVID-19 Pandemic

    This study found disparities in caregiver deaths by race and ethnicity.

    1. A tale of two pandemics: How will COVID-19 and global trends in physical inactivity and sedentary behavior affect one another?

    This paper discusses the long-term consequences of physical inactivity after the pandemic is over.

    1. Racial and ethnic differentials in COVID-19-related job exposures by occupational standing in the U.S.

    This article examines ways in which racial and ethnic differences influence the likelihood of work-related exposure to COVID-19.

    1. Outcomes and Mortality Among Adults Hospitalized With COVID-19 at U.S. Medical Centers

    Among 192,550 adults hospitalized with COVID-19 who were discharged from 555 U.S. medical centers, the most common comorbidities included hypertension, diabetes and obesity.

    1. Hospitalizations for Chronic Disease and Acute Conditions in the Time of COVID-19

    A study of hospital admissions shows a substantial decrease in the number of non-COVID-related hospitalizations across a range of chronic conditions (heart failure, COPD), acute medical events that typically require inpatient management (myocardial infarction, appendicitis) and injuries. Causes include delayed care, patient avoidance of emergency care, lack of insurance coverage, increased threshold for hospitalization by clinicians, and changes in patient lifestyle and self-management in the context of social distancing.


    To learn about WorkCare’s suite of COVID-19 prevention and management solutions in the workplace, contact us at

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