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    Insights on COVID-19 Workers’ Compensation Trends

    • Published
    • 21 January 2022
    • Category
    • News

    In a recently published Insights article on trends in workers’ compensation, the National Council on Compensation Insurance (NCCI) reports that a growing number of state legislatures are likely to enact or expand COVID-19 and infectious disease presumption legislation this year. According to a Jan. 18, 2022, activity report, seven state legislatures were considering COVID-related presumptions in areas including occupational exposure, death or disability, and sources of infection.

    In 2020, nine states enacted COVID-19 workers’ compensation presumptions. In 2021, five states passed legislation to extend or expand presumptions; two established new presumptions for certain types of workers; at least 12 states introduced legislation and two enacted rules to establish presumptions for infectious or contagious diseases, COVID-19 or similar disease, and/or future qualifying pandemics, the NCCI reports.

    In addition, several states introduced legislation in late 2021 to establish a workers’ compensation presumption for adverse effects from an employer-mandated COVID vaccine.

    Generally speaking, to be compensable and subject to workers’ compensation benefit eligibility, a claim must arise out of the course and scope of employment and be caused by conditions particular to work. Determinations in COVID-19 cases depend on jurisdiction-specific statutes, regulations and court interpretations. OliverWyman, a management consulting and actuarial firm, cites additional factors that apply to COVID-19 presumptions:

    • Some jurisdictions have different standards for different diseases or exclude ordinary diseases of life, such as influenza, from coverage.
    • Specific employee classifications, most notably those involved in health care with direct patient contact and public safety officers, may have lower thresholds of compensability than other employee classifications.
    • Some jurisdictions have implemented material policy changes that impact the compensability of COVID-19 related claims.

    Estimates of COVID-related workers’ compensation costs vary widely. Data indicate medical costs are significantly lower than indemnity costs, except in catastrophic cases.

    The NCCI estimated in June 2021 that COVID-related losses have the potential to exceed $500 million during the pandemic in jurisdictions where it provides ratemaking services to non-self-insured companies. At the end of 2020, private carriers and state funds reported 45,000 pandemic-related claims to NCCI associated with $260 million in case-incurred losses – an average of $6,000 per claim. It is too soon to tell how the Omicron spike may change these projections. In California alone, for example, state regulators now estimate claims costs could be $2-3 million for employers and insurers.

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