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Workers' Compensation

Impact of COVID-19 on Workers’ Compensation: The Experts Weigh In

Rapidly changing regulations and a barrage of new directives issued by states across the country in response to COVID-19 are leaving employers and workers’ compensation professionals with more questions than answers regarding how to handle existing claims, what to expect as new claims are filed, and how to implement safe return-to-work protocols. In the third COVID-19 Out Front Ideas webinar hosted by workers’ compensation experts Kimberly George and Mark Walls, industry specialists Nina Mcilree, M.D., Max Koonce, J.D., and Thomas A. Robinson, J.D., discuss the legal and regulatory challenges posed by COVID-19, and address key issues regarding the pandemic’s impact on the workers’ compensation community.

According to the panel, one of the most salient issues that has arisen in the context of handling COVID-19 claims surrounds new presumption laws being released by a growing number of states. Robinson identified at least nine states, including California, Washington, North Dakota, Missouri, Kentucky, Illinois, Minnesota, Utah, and Wisconsin, that have released executive orders, adopted regulatory changes and/or enacted legislation creating a rebuttable presumption of industrial causation applicable to COVID-19 claims filed by specified workers. Although most jurisdictions have so far limited application of the new presumption to healthcare workers and first responders, some have extended it to all workers deemed “essential.” What this means, Robinson explains, is that workers infected with COVID-19 who are covered by the presumption will not be required to prove they contracted the disease at work to receive workers’ compensation benefits. Rather, industrial causation will be presumed, and the burden will shift to the employer or carrier to establish that infection occurred outside of work.

Robinson, who authors a workers’ compensation blog at workcompwriter.com and co-authors the Larson’s Workers’ Compensation Law treatise, says it is unprecedented in his 40-plus years in the industry for governors, by executive order, and workers’ compensation commissioners to bypass the legislative process and unilaterally change workers’ compensation laws. But with COVID-19 quickly altering the terrain, states are rushing to put new rules and legislation into effect. Robinson believes the burden placed on employers by the new presumption laws to prove non-industrial causation of COVID-19 will be difficult to meet. Koonce, chief casualty claims officer at Sedgwick, adds that placing the burden of proof on employers will force claims administrators to investigate COVID-19 claims differently than other claims, because they will be required to focus on testing and engage in extensive contact tracing to determine compensability.

Koonce also foresees other issues arising when the presumption laws become effective. For one, he is concerned that application of the presumption to some employees and not others may create inequities between different classes of employees, especially if they have a similar risk of exposure to COVID-19. Further concerning to Koonce is the fact that some states are instituting conclusive, rather than rebuttable, presumptions for COVID-19 claims, which will leave employers/carriers in those jurisdictions with no opportunity to dispute the claims and result in automatic compensability. Koonce says this runs contrary to the basic principles underlying enactment of the workers’ compensation laws. Walls agrees that there are various aspects of the new presumption orders that may present challenges, noting that many only vaguely define which workers actually qualify for the presumption, thereby creating ambiguity regarding the presumption’s application.

Besides having to meet a stricter burden of proof to dispute COVID-19 claims, some employers may face civil liability related to COVID-19 exposure. Robinson explains that a number of states provide an exception to the workers’ compensation exclusive remedy rule when an employer’s failure to maintain a safe work environment creates a “substantial certainty” of injury or illness. He believes that certain employees, particularly those who are not covered by the COVID-19 presumptions, may file civil suits against their employers on the theory that being required to work during the pandemic created a dangerous situation in which COVID-19 was substantially certain to occur.

As some states begin to relax the restrictions put in place after COVID-19, employers are considering strategies to safely return their employees to the workplace. On this topic, Mcilree, who was a practicing physician prior to joining the medical management team at Zurich Insurance, explains that there is no “one-size-fits-all” procedure for employers to implement a safe return-to-work. Employers will have to assess the specific community in which they operate and also evaluate their own physical workplace as well as the unique concerns of their employees in determining how best to bring employees back to the workplace setting.

Mcilree emphasizes that to create a safe work environment, employers should become familiar with and adhere to safety protocols set forth by their state’s Department of Public Health. Generally, Mcilree notes, employers should have in place an effective testing and screening process and create a physical workplace with adequate social distancing between workers to reduce their exposure to COVID-19. Measures employers should consider include limiting the use of common areas such as cafeterias and small conference rooms, reducing shared office equipment, requiring employees to wear masks, and encouraging frequent handwashing.

According to Mcilree, it is crucial for employers to educate their employees regarding self-protection and safety. By the same token, employees must be proactive when it comes to their own health. That means staying home if they are symptomatic and seeking medical treatment when necessary. Mcilree cautions that some employees may feel unsafe returning to work or have other personal challenges surrounding the return to work that may require accommodation by their employers. Finally, Mcilree points out, employers need to be cognizant of protecting the community at large when businesses start to reopen by ensuring there are community resources available to treat sick employees and making certain they have an efficacious process in place to quickly shut down operations if the pandemic spikes, in order to avoid community-wide infection.

Employers who have temporarily ceased operations due to COVID-19 should check the rules in their jurisdiction to determine how to handle employees with existing claims who have been released to modified work, says Koonce, as the rules may vary between states. However, where no light duty is currently available, it is likely that TTD benefits will be continued until the employer is able to make an offer of work. Of course, Koonce points out, employees released to full duty who are unable to return to work because of a COVID-19 shut down will no longer be entitled to workers’ compensation benefits but may be eligible to collect unemployment benefits. Koonce notes that employees with open claims will be able to continue receiving medical treatment telephonically or virtually even if they cannot meet face-to-face with their medical providers.

Despite the uncertainties created by COVID-19, Koonce and Mcilree agree that it is possible to push existing workers’ compensation claims towards resolution. Koonce indicates that a number of states have moved to virtual or telephonic settlement hearings and have even started to utilize video-based notarization to create a “visual presence” for parties signing settlement documents. Interestingly, Koonce has seen a recent rise in the number of injured workers wishing to settle their claims. He attributes this trend to an increased focus by these workers on other aspects of their lives affected by the current crisis.

In closing, the panel suggests that employers report claims to their carrier as soon as an employee alleges potential workplace exposure to COVID-19, and also advises employers and claims adjusters to frequently check their jurisdictions for new rules and directives that may affect them.

Interested readers can listen to the full webinar here: https://goto.webcasts.com/viewer/event.jsp?ei=1298649&tp_key=ec0049c2c7

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