COVID-19 and Employees’ Compensation Revisited: Navigating the Pandemic to Perceive What’s Subsequent

COVID-19 and Workers’ Compensation Revisited: Navigating the Pandemic to Understand What’s Next

Last year we discussed how the pandemic could affect workers’ claims for damages. Now, almost a year later, we are pondering some of the answers to these questions, but we also acknowledge that there is more to be uncovered before we can fully understand the long-term effects of the pandemic.

The upcoming legislation to expand employee compensation entitlements was a significant part of our assumptions last year, and we reported that changes to this could result in a significant increase in claims payments. How has this legislation evolved and how have state workers’ remuneration systems evolved in response?

New legislation, broad interpretations and expanded eligibility

As states control their own workers ‘compensation systems, it has been left to state legislatures to expand the presumption of workers’ eligibility to claim COVID-19.

According to the National Conference of State LegislaturesMore than a dozen states including Alaska, Arkansas, California, Illinois, Michigan, New Jersey, Utah and others have made changes or taken executive action to change their workers’ compensation laws in the face of the pandemic. Most of these states have included only those workers in health care, frontline ambulance, or “essential” job roles, but states like California have expanded their expansion to include all workers.

Interestingly, there was another way of extending the presumption of eligibility without changing the law. In West Virginia, the insurance commissioner added the potential for COVID-19 to the state’s occupational disease rating. This step allows affected workers to submit benefit claims and prevents employers from investigating the claim before reporting it to their workers ’compensation agency.

Many other states have laws at different stages of the legislative process, which makes it difficult to keep track of which safeguards are available in which state. However, we know more about how these changes to the eligibility criteria affected claims.

Unexpected results for COVID-19 claims

As the pandemic begins, insurance carriers and companies are concerned about the number of claims for damages by workers related to COVID-19. That concern grew as states began to widen the presumption of eligibility for these claims.

These worries were largely not realized. Yes, hundreds of thousands of coronavirus-related applications were filed in 2020, but the decline in non-COVID-19 applications more than made up for them due to layoffs, shutdowns and remote working. The The National Compensation Insurance Council informs us of this The compensation payments and liabilities of employees in the first three quarters of 2020 were 7.6% lower than in the previous year.

We also see a significant percentage of virus-related claims being rejected by carriers, even in states that have expanded their presumed eligibility rules. Consider these results, Courtesy of the Wall Street Journal::

  • In Texas, more than 32,000 claims related to COVID-19 have been filed as of December 6, and 45% of those claims have been denied by insurers.
  • In California, 93,470 applications had been submitted by the end of December (due to the comparatively broad eligibility criteria) and 26% of those applications were denied.
  • Florida, where frontline officials who are government officials suspect eligibility, received 29,400 COVID-19 related filings. For public employees, a rate of 22% was rejected, while for private sector employees, 56% of claims were rejected.

Insurers denied many of these claims because they had to prove that exposure to COVID-19 was work-related. The high rate of rejection has further slowed claims settlement due to the appeal process.

According to information published independently by several states, payouts for employee compensation claims related to COVID-19 have so far been relatively inexpensive. For example, the Wall Street Journal points out Of the claims Florida paid out through December, less than 2% had a price greater than $ 10,000.

What’s next for claims handling?

The ever evolving reality of the pandemic demonstrates the need for analysis within the management of employee compensation claims. The analysis provides the insight needed to keep pace with changes in three main areas: resumption of non-COVID-19 claims, postponed treatments and long-term effects of the virus.

With the introduction of vaccinations, more states will allow businesses to reopen, bringing a renewed wave of non-coronavirus-related claims for damages in the workplace. You can use analytics to determine which industries are being reset and where those claims are likely to come from.

More and more health systems are returning to normal operations, and that means postponed and elective treatments and exams can take place again. With the right insights, you can determine which claims should be monitored so that you can sort the right resources by severity.

It’s also important to monitor macro-level trends in those affected by the coronavirus so you can see if there are any long-term effects that need to be addressed preventively. It is important to keep up to date with these evolving cases to ensure these claims don’t come as a costly surprise later.

With analytics, your company is focused on the right problem

As the ground continues to shift, it is more important than ever to be prepared to shift focus to where it is needed most. When you have a solution, you can keep your attention where it is needed.

Adam Wesson

Courtesy of ISO Claims Partners Blog


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Disclaimer: publishes independently produced publications by various stakeholders in the compensation industry. The opinions expressed are solely those of the author and do not necessarily reflect those of

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