The Impact of Covid-19 on Workers Compensation Insurance
Covid-19 has had a major influence on workers compensation insurance. Workers compensation laws can vary widely from state to state, but generally have one thing in common: They provide compensation only for “occupational diseases” that arise out of and in the course of employment, with many statutes specifically excluding “ordinary diseases of life” such as a cold or the flu. Workers with qualified workers compensation claims can receive certain specified benefits, including wage loss benefits, medical benefits, rehabilitation benefits, and burial allowance in the case of the employee’s death.
What about employees who claim to have contracted Covid-19 while on the job? Ordinarily, it would be an uphill battled for workers to prove that they contracted the coronavirus while at work, given there are so many potential ways Covid-19 can be contracted elsewhere.
To help certain workers overcome this burden of proof, many states have allowed industry-wide exceptions for occupations where workers are considered essential, and may be at high risk for contracting Covid-19 on the job. Those states have created a legal presumption that workers in particular industries who contact the coronavirus have done so in the course of their employment, making it much easier for them to obtain workers compensation coverage.
In Michigan, under the 3-30-2020 Workers Disability Compensation Agency Emergency Rules, a person designated as a First Response Employee who is diagnosed with Covid-19 either by a physician or because of a test is considered to have an illness that arises out of and in the course of their employment. “First Response Employee” is defined as one or more of:
- A person working in ambulance operations and advanced mobile emergency care services, county medical care facilities, emergency services, emergency medical services, homes for the aged, hospices, hospitals and nursing homes.
- A person working in a home health agency or visiting nurse association.
- Any person working as a physician, physician assistant, nurse, emergency medical technician, paramedic or respiratory therapist.
- Any police officers, fire fighters, emergency medical technicians, on-call members of a fire department, volunteer civil defense workers, on-call members of a life support agency or members of an emergency rescue team, as those terms are used in the Worker's Disability Compensation Act of 1969, 1969 PA 317.
- A member of the Michigan State Police or an officer of the Commercial Vehicle Enforcement Division of the Department of the State Police.
- A Michigan Department of Corrections Officer or local corrections officer.
Many states have passed similar “presumption statutes,” some of which establish a much broader category of covered employees than does the Michigan rule. Some, for example, include grocery store workers and delivery service personnel. Such workers who contract the Covid-19 virus are presumed to have contracted it at work, and have a valid workers’ comp claim unless the insurer or employer can overcome that presumption that the employee’s infection was not work related. This can be a tough burden to overcome.
Workers diagnosed with Covid-19 who are not considered First Response Employees can still make claims of an occupational disease. If a worker can identify specific exposure to the coronavirus, such as date and location, and has been diagnosed by a physician or test, he or she may be able show that the exposure arose out of and in and in the course of employment, like any other work injury. According to the Michigan workers’ compensation statute, “Personal injury includes a disease or disability that is due to causes and conditions that are characteristic of and peculiar to the business of the employer and that arises out of and in the course of the employment.” The key with any injury or illness is that it must be attributable to work. For example, the statute states that, “An ordinary disease of life to which the public is generally exposed outside of the employment is not compensable.” Whether Covid-19 arises out of and in the course of employment is an open question for workers who don’t fall within the category of First Response Employees.
So far, insurance industry data shows that the majority of workers compensation claims by workers infected with Covide-19, but do not have legal presumption of compensability, have been denied. Even where workers have such a presumption, employers have been able to defeat some of those claims by demonstrating that they have had in place clearly documented safety protocols. The data show that in the past year 31% of all workers compensation claims alleged Covid-19 infections, but such claims comprised just 8% of total benefits as a percentage of total claims paid. The majority of accepted Covid-19 claims were filed by health care workers, first responders and workers in “high-infection” worker environments, such as the meat packing industry.
In conclusion, the Covid-19 pandemic has challenged, and will continue to challenge, a broad range of businesses, especially those in the medical, hospitality, first responder, and service industries. A business’s best line of defense to workers compensation claims is to stay informed of, and compliant with, industry and legislative changes, such as CDC Guidelines and new OSHA standards designed to combat the pandemic.