INSURANCE LAW UPDATE ON COVID-19: WORKERS’ COMPENSATION INSURANCE
The coronavirus pandemic has already resulted in workers’ compensation claims, and more are expected. Whether those claims succeed depends on the individual circumstances and the state where the infection occurred. While compensability issues will play out case-by-case, workers’ compensation insurers in at least two states have decided that they will guarantee workers’ compensation benefits for health care workers and first responders.
Kentucky Employers Mutual Insurance Co. announced that effective immediately, it will pay wage-replacement benefits for any first responder or employee in the medical field who is quarantined because of direct exposure to a person diagnosed with COVID-19.
The Washington State Department of Labor and Industries also decided to pay wage-loss and medical treatment expenses for any health care worker or first responder who is quarantined because of coronavirus exposure. Washington operates a monopoly workers’ comp system, so that policy impacts every employee in the state who is covered by the state system.
The National Council on Compensation Insurance, a rate advisory organization for most U.S. states, said that it remains to be seen whether other states will follow the lead of Washington and Kentucky. NCCI noted that many state workers’ comp statutes exclude “ordinary diseases of life” such as the common cold or flu. However, NCCI said at least ten states had issued mandates for coverage of coronavirus by health insurers. The directives vary but include coverage for testing and visits to emergency rooms or urgent care facilities without deductibles or copays, NCCI said.
Two insurance carriers have given notice of their stance toward the coming workers’ comp claims: Texas Mutual Insurance Co. and SAIF, Oregon’s state-chartered workers’ comp insurer. Both issued bulletins that said they would decide whether coronavirus exposure is compensable on a case-by-case basis. Texas Mutual added the caveat that the more widespread COVID-19 becomes, the more difficult it may be for the employee to show that it is work-related rather than an ordinary disease of life to which the general public is exposed.
A white paper issued by Aon explains why greater exposure to the general public tends to limit liability for workers’ comp insurers. The report said that “[w]hile every jurisdiction has specific laws pertaining to workers’ compensation and communicable disease claims, the general rule for most industries is that the matter would likely not be deemed compensable if the employee was considered at no greater risk than the general public.”
In West Virginia, the Insurance Commissioner issued an Emergency Order on March 23, 2020, which provides that the normal time standards for claims handling applicable to workers’ compensation insurers and other regulated entities[1] are suspended until further notice, provided that workers’ compensation insurers and other regulated entities shall continue to adjust workers’ compensation claims as expeditiously as possible and shall utilize all possible methods of adjusting claims remotely while striving to meet normal time standards for the adjustment and resolution of claims whenever possible. Workers’ compensation insurers and other regulated entities shall prioritize claims adjustment and resolution strategies during the insurance emergency to ensure that high-priority claims are addressed before lower priority claims. Further, workers’ compensation insurers and other regulated entities shall not terminate or suspend a claimant’s temporary total disability benefits for failure to undergo examinations or needed treatment during the insurance emergency, as many medical and healthcare providers have closed offices and deferred or suspended all non-emergent procedures or treatment. Claimants may have difficulty in continuing ongoing care or treatment or obtaining an examination or may be quarantined or staying in their homes in compliance with Executive Order 9-20, and as a result, opt to forego all but the most necessary medical treatment due to the COVID-19 pandemic.
[1] As set forth in Title 85, Series 1, Section 10, of the West Virginia Code of State Rules.