WC and COVID-19: Should the Feds Be Involved?

Nancy Grover

Sarasota, FL (WorkersCompensation.com) – With states increasingly adopting presumptions for workers who contract the coronavirus to make them eligible for workers’ compensation benefits, some in the industry are advancing the idea of a federal fund. One in particular would provide benefits to the families of workers who die as a result of the virus.

“This Fund will provide a family of such deceased worker a prompt payment of a Covid 19 related death award as well as the formal recognition that the deceased worker had contributed his or her life in the national response to the pandemic,” suggested Robert R. Snashall. “Finally, such Federal award does not preclude any family from filing a separate death benefit claim with their respective workers’ compensation agency which may accept or deny the claim according to the laws of such jurisdiction and the facts of the case.”

Snashall, who served as the Chairman of the New York Workers’ Compensation Board from 1995 – 2003, said the idea of the fund is to ensure families of deceased workers received at least some funds in fairly short order.

“Under current workers’ compensation laws, some insurance companies will accept the claims, but other carriers and employers will contest and litigate the claims,” Snashall wrote. “I say this based on my prior experience as the Chair of the NYSWCB at the time of the September 11 attack when some carriers and employers readily accepted liability for the death claims and promptly paid the claims, yet other carriers and employers contested the claims.”

Snashall has written to the White House, congressional leaders and many in the workers’ compensation system. He says his proposed fund should not be considered a gift, but a recognition that the country appreciates the fact that these workers are keeping the country running.

“My feeling is that because this is a national pandemic and because we’re asking these essential workers to report every day so we can buy our groceries, pick up our medications, ride the busses and subways, go to hospitals for care, that we have an obligation, I believe, to provide a program,” he said. “I believe it’s the responsibility of the federal government to create this fund, and to implement it without disturbing, divesting any state of their right under their workers’ compensation law of handling cases in the manner they see fit.”

Snashall said his proposal leaves to Congress the details of such a plan; such as the amount(s) of the awards, the procedures for determining them, the funding and the administration of the program. His suggestion is to have it created and administered by the September 11th Victim Compensation Fund. Created by Congress, the VCF compensates victims or their families affected by the terrorist attacks of Sept. 11, 2001.

Heroes Hazard Pay

Also taking a cue from the response to the Sept. 11 attacks and response is the idea of recognizing essential workers by giving them increased wages. New York Gov. Andrew Cuomo has endorsed the idea of a Heroes Compensation Fund, whereby essential workers required to work during the pandemic would receive money in the form of increased hourly wages up to a certain amount.

Some democratic members of Congress are behind the idea and say it would be federally funded and provide funds directly to employers that apply, as a way to increase their employee’s paychecks. Sen. Minority Leader Chuck Schumer has said the idea should be included in the next phase of Congress’ response to the virus.

TRIA-Type Program

Also being discussed among some in the industry is a federal program along the lines of the Terrorist Risk Insurance Program. Adopted after the Sept. 11 terrorist attacks, the program provides a federal backstop for insurance claims related to the attacks.

Some in the insurance industry argue that the majority of claims from COVID-19 are likely to be relatively insignificant, with the bulk paying indemnity for the brief period affected workers are out of work, and that the industry is well funded to incur these costs.

Those who support the idea say the federal government should enact legislation that mandates worker health and safety. “Economically, TRIA type legislation must be crafted that provides for prevention/research/treatment as well as compensation on a national level,” wrote attorney Jon L. Gelman, in a recent blog post. “Workers should not need to choose whether they will be best protected in a ‘blue’ or ‘red’ state. This fractionalized national policy will lead to prolonged, 2nd, 3rd and 4th waves of the COVID-19 virus. On an urgent basis, a consistent, logical, scientific and non-political approach must be implemented by Congress.”

proposal put forth by Rep. Maxine Waters, (D-CA) would create a Pandemic Risk Insurance Act. ‘PRIA’ would create a reinsurance program, similar to TRIA for pandemics, by capping the total insurance losses that insurers would face. Some have suggested combining TRIA and PRIA into a singular piece of legislation.

What is extremely important, according to Snashall, is implementing a reporting system and a central databank that gathers information about cases throughout the country. This, he says will allow researchers and policymakers to get a better idea of the impact of the pandemic on workers’ compensation systems.

“It’s incredibly important to gather this data so that it can be analyzed and fed into the researchers and then will eventually make it into the actuarial computations and give us an idea of whether we should have a surcharge on premiums in the future for this type of situation,” Snashall said. “I’m not aware of any surcharges for a pandemic that take place for deaths or injuries due to pandemics, but I think that’s a great idea. Taking a look at providing that backstop is important and whether that backstop would apply to all insurance companies that write workers’ compensation, would it apply to those companies that are self insured? How would that be implemented around the country?”

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