Sarasota, FL (WorkersCompensation.com) – Fewer than expected COVID-19 related claims and lower non-COVID claim frequency spells good news for the workers’ compensation system. But that should not be a signal for employers/payers to get complacent, according to a new analysis.
The report by Marsh shows the workers’ compensation line is doing better than expected at the start of the pandemic in terms of the long term impacts on profitability. But it also warns of persistent challenges and offers advice for payers to manage insurance coverage and workplace safety programs going forward.
“For example, several factors — including the calculation of employee payroll, classification of employees based on the risk inherent in their normal job functions, and employers’ injury experience relative to their peers (known as experience rating modification, or experience mod) — can dictate how much workers’ compensation insurance premium an individual employer must pay,” the report says. “The pandemic, however, has prompted employment decisions that may make quantifying these variables difficult.”
An anticipated huge influx of COVID-19 claims has really not materialized, at least not yet. Marsh cites a recent report from the California Workers’ Compensation Institute showing there were slightly fewer than 42,000 claims with injury dates between January and August, as reported through September 21. “But owing to delayed reporting, CWCI projects that claims for that time period will ultimately total more than 48,000,” the report notes. “In addition to claims for occupational exposure to COVID-19, an influx of post-traumatic stress and mental health claims could also be on the way.”
The COVID-19 related claims to date have been relatively inexpensive — at least, for the most part. A survey from Health Strategy Associated reported 96 percent of these claims cost less than $3,500 each, since many who contract the virus don’t need intensive medical care or time off work. But costs for the remaining 4 percent of COVID claims tell a different story. These, the report notes can cost in the hundreds of thousands of dollars.
“Some coronavirus patients — particularly those with preexisting medical conditions such as diabetes, hypertension, obesity, chronic lung disease, or heart disease — have required extended hospitalizations, including in intensive care units (ICUs),” the report says. “Not only has the immediate delivery of this more intensive care cost more for employers, it could also lead to future adverse effects for claimants.”
A 2013 study in the Netherlands, for example, showed that patients who are admitted to ICUs were at higher risk of developing chronic conditions later. A separate study of 50 critically ill COVID-19 patients suggested acute kidney injuries requiring longer term kidney care occurred.
Many COVID-19 claims have not met compensability requirements, according to the report. About one-third have been denied due to a lack of diagnosis and/or symptoms, refusal by claimants to be tested for the virus, and the fact that some have mainly been working from home. It says to date about 20 percent to 30 percent of all claims filed have been accepted, mainly from healthcare workers.
Advice for Employers
The report offers recommendations for payers to facilitate and simplify reporting, including:
- Maintain separate records for payroll given to employees for time not worked related to pandemic (not rolled into paid time off and/or another earnings category).
- Maintain payroll records for employees that continue to work, but have taken on different duties and responsibilities in a manner that the payroll can be identified and split based on applicable workers’ compensation class codes.
- Maintain separate overtime payroll records related to COVID-19 work.
- Record the start and end dates of any employee furloughs.
The authors also suggest using “compassion, care and injury prevention” at work sites. “Even under the best of circumstances prior to COVID-19, injured employees have often had difficulty navigating the workers’ compensation claims process,” they write. “As we approach six months since COVID-19 was declared a pandemic — with no immediate end in sight — claimants may be especially anxious about their recovery and long-term job prospects. “
A claims advocacy approach is suggested, with the focus on communication, education and transparency. Showing that employers care for their workers “can yield less contentious relationships, fewer instances of injured workers hiring attorneys, and lower claims costs.”