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

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.

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