Workers Get Workers’ Comp Presumption for COVID-19

covid-19 workers

California Gov. Gavin Newsom has issued an executive order requiring that workers who either test positive for COVID-19 or are diagnosed by a physician as having coronavirus are eligible for workers’ compensation benefits.

The order means that it will automatically be presumed that the employee contracted the virus on the job if they test positive or receive a diagnosis within 14 days of their last shift.

Additionally, the employee must have been working at a worksite and not from home to qualify, and the diagnosis must be confirmed by testing within 30 days of the original diagnosis.

The order covers any worker that reports to a worksite, including “essential workers,” which include those in health care, emergency services, trucking, construction, food, warehousing, delivery, and more.

Workers’ comp benefits include partial wage replacement for any missed time from work, as well as covering all related medical costs and death benefits for their family should the unthinkable happen.

If the employer believes an employee didn’t contract the virus at work, they will have the burden of proving the individual contracted the virus elsewhere, which would be a difficult endeavor.

The rule is temporary and will cover cases dating back to March 19. It will sunset on July 6 (60 days after the announcement was made on May 6).

No adverse X-Mod effects

While the order will make it easier for essential workers to file workers’ comp claims, employers do not have to worry about the effects on their workers’ compensation claims experience.

That’s because the Workers’ Compensation Insurance Rating Bureau has proposed its own rules that would exempt any COVID-19 claims from an employer’s claims history, so that it would not affect their experience modifier (X-Mod).

That means if an employer has any workers who file COVID-19 claims, their premiums would not rise due to those claims.

The proposal will be reviewed by the Department of Insurance in May and it’s likely, according to industry observers, that it will be approved. It too will sunset 30 days after shelter-at-home orders are lifted.

The Rating Bureau estimates that the cost of COVID-19 workers’ compensation claims in California could range from $2.2 billion to $33.6 billion annually. A mid-range estimate of $11.2 billion would equate to more than 60% of all California workers’ comp annual claims before the pandemic.

State Fund to Accept All COVID-19 Claims by Essential Workers

essential worker

State Compensation Insurance Fund has announced that it will accept any workers’ comp claims for a diagnosed case of COVID-19 filed by essential workers.

Workers deemed “essential” who contract COVID-19 would be presumed to have caught the virus at work, and hence would be eligible for all normal workers’ comp benefits under the law.

Only workers for employers who are insured by State Fund will benefit from the decision by the insurer. But that could change.

Gov. Gavin Newsom is considering issuing an executive order that would require a presumption that any case of infection by an essential worker is work-related and eligible for workers’ compensation benefits. That would include partial wage replacement for any missed time from work, as well as covering all related medical costs and death benefits for their family should the unthinkable happen.

State Fund had earlier created the Essential Worker Support Fund to partially cover any workers it insures, but the new action replaces that fund so that workers who file COVID-19 claims are entitled to all the same benefits (indemnity for lost wages and medical costs related to treating the virus, including hospitalization if needed).

“We currently estimate these added benefits will require approximately … $115 million,” State Fund said in its announcement, adding, “We will still provide temporary disability benefits to any covered essential worker who must self-quarantine if they are not covered by another source.”

State Fund’s new rule only applies to cases that were filed by essential workers who have been on the job since Newsom issued the shelter-at-home order on May 19. The rule will be pulled once the order is lifted.

Essential employees include those who work in food, warehousing, delivery, agriculture, health care, energy, emergency services, and more.

Good news for workers, employers

The move by State Fund and the possible executive order are good news for workers as well as employers. Any essential worker that currently contracts COVID-19 would otherwise have a steep hill to climb in trying to prove that they caught it at work unless they are health care workers or first responders.

Not only that, but the case can get tied up if the employer challenges the claim and it goes to the Workers’ Compensation Appeals Board for adjudication.

It would be good news for employers too, as the Workers’ Compensation Insurance Rating Bureau has proposed its own rules that would exempt any COVID-19 claims from an employer’s claims history so that it would not affect their experience modifier (X-Mod).

That means if an employer has any employees who file COVID-19 claims, their premiums would not rise due to those claims.

The Rating Bureau estimates that the cost of COVID-19 claims in California could range from $2.2 billion to $33.6 billion annually. A mid-range estimate of $11.2 billion would equate to more than 60% of all California workers’ comp annual claims before the pandemic.

New Rule Simplifies X-Mod Calculation, Encourages Reporting First Aid Claims

A new method for calculating workers’ compensation experience modifications (X-Mods) took effect in California on Jan. 1.

The Workers’ Compensation Insurance Rating Bureau of California has created a new simplified formula for calculating X-Mods as part of its efforts to add more transparency to the process. The new formula excludes the first $250 of every claim for the X-Mod computation, no matter how large or small the claim is.

This also means that if an employer pays, say, $200 for first aid on a minor workplace injury, they are required to report it as a claim. Doing so will not affect their X-Mod in any way, no matter how many first aid claims they have.

The goal is to encourage employers to report all claims, even those that may require minimal medical treatment or first aid.

Examples:

  • If you have a $10,000 primary threshold and you have a claim that ends up costing $6,000, the amount used to compute your X-Mod would be $5,750.
  • If you have a $10,000 primary threshold and you have a claim that ends up costing $17,000, the amount used for calculating your X-Mod would be $9,750.
  • If you have a claim that’s valued at $250 or less, the claim will still show on your experience rating worksheet, but it will not be used at all when calculating your X-Mod.

Does this affect your current X-Mod?

Yes. Any claim incurred against policies incepting during the experience period for your 2019 experience modification, which includes 2015, 2016 and 2017 policy years, will be used in the X-Mod computation at $250 less than its reported value.

Claims costing $250 or less will be shown on worksheets, but will not be used in X-Mod calculation.

Reporting first aid claims is required

Workers’ comp regulations require that all claims that cost some amount of money to treat must be reported to your workers’ comp carrier, which in turn must report to the Rating Bureau so that it can accurately keep workers’ comp records on employers that are experience rated.

The rules have already been on the books for years, but the problem of non-reporting became too great, so the Rating Bureau has stepped up to encourage employers to follow the rules. And in this case, it can’t work against you.