Articles | Cases

Coronavirus, Workers' Compensation and OSHA regulatory and legislative updates


Like everything else the pandemic touches, the regulatory and legislative actions related to COVID-19 are a work in progress and continue to evolve.

Workers' Compensation

Presumptive coverage

Governors and state legislatures grappling with how best to protect employees, while balancing the interests of businesses, continue to look to emergency adjustments to the workers' compensation system to deal with COVID-19. The dominant issue is providing presumption of coverage for COVID-19 so that first responders and health care workers and, in some cases, other essential workers, have unimpeded access to workers' compensation benefits.

Legislation is pending or has passed in several states, but the laws vary significantly. In some states, the presumption is conclusive, scrapping the basic tenet of workers' comp that employees must prove they were exposed to the virus during the course of their employment. But in others, the presumption is rebuttable. The trend, which dramatically alters the workers' comp landscape, is so prevalent that the National Council on Compensation Insurance, (NCCI) tracks this information.

States implementing changes include Alaska, Arkansas, California, Florida, Kentucky, Michigan, Minnesota, Missouri, New Hampshire, New Mexico, North Dakota, Utah, Washington, Wisconsin, and Wyoming. States with legislation pending include Illinois, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, and Vermont. Updated status can be found here.

Not surprisingly, the action with the broadest sweep came from California. On May 6, Governor Gavin Newsom issued an Executive Order making it easier for employees to prove that they contracted COVID-19 at work and thus, get workers' compensation benefits. While the presumption can be disputed if there is evidence the disease was contracted outside of work, the order effectively makes workers' comp coverage available to all employees who worked outside their homes from March 19 to July 5 and contracted COVID-19 within two weeks of performing on-the-job duties. It is expected to cost between $600 million on the low end and $2 billion if higher estimates come to fruition, according to the WCIRB.

In Illinois, a significant court challenge compelled the Workers' Compensation Commission to withdraw a sweeping emergency amendment that would have created a rebuttable presumption that when medical personnel, first responders, and essential employees contracted COVID-19, it was work-related. Both houses of the General Assembly recently passed a more limited bill that was a compromise measure that both businesses and workers' advocates could live with. It provides death benefits for first responders who were presumably infected with COVID-19 on duty between March 9, 2020 and December 31, 2020 and worker's compensation benefits for essential workers under certain conditions, but gives businesses a path to rebuttal.

The term "COVID-19 first responder or front-line worker" is defined in the bill as "all individuals employed as police, fire personnel, emergency medical technicians, or paramedics; all individuals employed and considered as first responders; all workers for health care providers, including nursing homes and rehabilitation facilities and home care workers, correction officers, and any individuals employed by essential businesses and operations as defined in Executive Order 2020-10 dated March 20, 2020, as long as individuals employed by essential businesses and operations are required by their employment to encounter members of the general public or to work in employment locations of more than 15 employees. For purposes of this subsection only, an employee's home or place of residence is not a place of employment, except for home care workers." Further, COVID-19 claims will not count against employers' experience modification and premiums.

Employers can rebut claims under certain conditions if they can demonstrate the workplace was following current public health guidelines for two weeks before the employee claims to have contracted the virus; can provide proof that the employee was exposed by another source outside of the workplace; or, the employee was working from home for at least 14 days before the injury claim. Documentation will be critical to support rebuttals. The bill is expected to be signed by the Governor.

Employers and insurers are concerned that these presumption policies will increase insurance costs for employers at a time when businesses are already facing significant financial challenges. In Minnesota, the Senate recently passed a bill which creates a coronavirus relief fund with stipulations that such funds will help local government organizations cover workers' compensation costs related to COVID-19, among other needs generated by the pandemic.

While few states have extended presumption beyond health care workers and first responders, some have issued warnings about the handling of COVID-19 claims. Recently, the Industrial Commission of Arizona issued a policy statement noting "claim denials related to COVID-19, like any claim denial, must be 'well-grounded in fact' and 'warranted by existing law'" or based upon a good faith argument for the extension, modification, or reversal of existing law.


NCCI: Impact of claims on Experience Mod

In mid-May, NCCI posted Item E-1407 which excludes all COVID-19 claims from Experience Mods. In the early days of the crisis, new claim codes were created specifically for COVID-19 infections that were paid under workers' compensation. This filing serves to exclude those claims from experience rating (and merit rating). This applies to claims with accident dates of December 1, 2019 and later and there is currently no expiration date for this rule.

This rule has been approved by Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Maine, Maryland, Mississippi, Montana, Nevada, New Hampshire, New Mexico, Oklahoma, South Dakota, Tennessee, Vermont, and West Virginia. Other states are expected to follow suit.


Independent states

Pennsylvania

In early May, the Pennsylvania Comp Bureau posted the rules relating to COVID-19, effective 3/1/20 to 12/31/20.

These changes allow for:

There was a filing to make changes to the Basic Manual as well as the Statistical Plan.


Delaware

Also in May, Delaware made changes identical to Pennsylvania, effective April 1, 2020.


New York

New York has approved new rules, which differ from other states. According to RC 2512, published 5/1, payroll for employees who are not working at all OR employees who are temporarily reassigned to work at home will have their payroll assigned to the new code 8873. 8873 will carry the same rate as 8810. This means that employees who are being paid to not work WILL have premium applied to them, albeit at the very low 8810 rate.This rule is retroactive to 3/16/20 and applies for 30 days following the lifting of the Stay at Home order.The filing also excludes COVID-19 claims from any future experience rating.


Massachusetts

The Massachusetts Rating Bureau released a statement, "For the time being, we are interpreting Rule V.G. 6 to apply to the COV-19 situation. It states that employees who are not on strike, but are unable to perform their normal duties because of a strike, and they are performing absolutely no work for their employer and are not present on their employer's premises during this period, such wages shall be assigned to Code 8810 - Clerical Office Employees NOC, provided the facts are clearly disclosed by the employer's records."


Minnesota

In Minnesota, the bureau has adopted NCCI's payroll rules, but has stated that COVID claims WILL BE included on the experience mod.


Michigan

Unlike most states, the Michigan bureau (CAOM) does not file rules on behalf of carriers operating there. The carriers have the option to adopt or not adopt anything. CAOM has approved NCCI's payroll rules for the Assigned Risk market, but individual carriers will have the option whether to follow this or not.


OSHA changes course again on recording of COVID-19 cases and increases onsite inspections

OSHA's shifting guidance has employers' heads spinning. For the third time since the onset of the pandemic, OSHA has issued guidance about recording COVID-19 cases. In March, it sent a memo reminding employers that COVID-19 diagnoses are recordable events, but in April it backtracked, significantly limiting the reporting requirements. Specifically, only cases related to health care workers, first responders, and correctional institution employees had to be recorded. All other employers were exempt except in cases in which "objective evidence" existed that a COVID-19 infection was work-related or the evidence was "reasonably available" to the employer.

New guidance announced on May 19 overrides the April guidance.Essentially, the new guidance requires an individualized work-relatedness analysis for all industries.

Effective May 26, COVID-19 cases are recordable if the illness is confirmed as COVID-19, the illness is work-related as defined by 29 CFR 1904.5 and the case involves at least one of the general recording criteria listed in 29 CFR 1904.7. The criteria include death, days away from work, medical treatment "beyond first aid," loss of consciousness, and restricted work or transfer to another job. The revised enforcement policy directs that employers "make reasonable efforts" to investigate confirmed cases of coronavirus in the workplace to determine if they were more likely than not work-related.

Recognizing employee privacy concerns, OSHA indicates that employers are "not expected to undertake extensive medical inquiries" and may rely only "on the information reasonably available to the employer at the time it made its work-relatedness determination." According to Conn Maciel Carey LLP, an OSHA/MSHA Workplace Safety, Labor and Employment Boutique Law Firm, it will be sufficient in most cases for employers to:

  1. Ask the employee how he believes he contracted the COVID-19 illness
  2. Discuss with the employee his work and out-of-work activities that may have led to the COVID-19 illness; and
  3. Review the employee's work environment for potential SARS-CoV-2 exposure (which should be informed by any other instances of workers in that environment contracting COVID-19 illness).

During the investigations, employers need to consider workers' privacy and refrain from disclosing the names of those who have tested positive for the virus to others in the workplace and should document all aspects of the investigation. OSHA notes, "If, after the reasonable and good faith inquiry described above, the employer cannot determine whether it is more likely than not that exposure in the workplace played a causal role with respect to a particular case of COVID-19, the employer does not need to record that COVID-19 illness."

To assist employers in identifying work-relatedness, OSHA describes the types of evidence that may weigh in favor of or against work-relatedness. For instance, OSHA says, COVID-19 illnesses "are likely work-related" if:

The guidance also indicates that an employee's COVID-19 illness likely is NOT work-related if:

As Conn Maciel Carey LLP points out, the biggest differences between the April 10 guidance and the May 19 guidance are:

  1. There is no exemption from conducting case-by-case work relatedness analyses for medium and low-risk exposure workplaces; and
  2. The new memo expands the examples of the type of objective evidence of likely work-relatedness from just a cluster of positive cases, to also include cases where someone contracts the illness after a lengthy exposure at work or has job duties that involve frequent, close exposure to the general public.

The firm also notes the importance of the term "no alternative explanation." Where there is widespread community spread, it is important to document if an employee acknowledges such interactions away from work.

When determining whether an employer has complied with the revised policy, OSHA instructs compliance officers in a memo issued the same day to apply these considerations:

Consistent with existing regulations, employers with no more than 10 employees and certain employers in "low-hazard industries" do not have an obligation to report COVID-19 cases unless a work-related illness results in death, in-patient hospitalization, amputation, or loss of an eye.

It is important to remember that even if a COVID-19 is recordable, it does not mean that it will be compensated by workers' comp. OSHA recordability does not impact workers' comp determinations and vice versa.


What employers should do now

For employers to prove a reasonable and full faith inquiry, Dustin Boss, a Certified Risk Architect and Master WorkComp Advisor with Ottawa Kent Insurance offers this advice:

Beyond the recording requirements, employers are exposed to the possibility of OSHA citations. As the fear of contracting the novel coronavirus permeates the workplace, thousands of employees have complained to OSHA regarding the insufficiency of their employers' protection against COVID-19. In the same news release announcing the new enforcement guidelines, OSHA announced that it is increasing in-person inspections at all types of workplaces. "The new enforcement guidance reflects changing circumstances in which many non-critical businesses have begun to reopen in areas of lower community spread. The risk of transmission is lower in specific categories of workplaces, and personal protective equipment potentially needed for inspections is more widely available. OSHA staff will continue to prioritize COVID-19 inspections, and will utilize all enforcement tools as OSHA has historically done."

Boss points out that enforcement of COVID-19 issues falls under the catch-all General Duty Clause that employers will provide a place of employment free from recognized hazards that are likely to cause death or serious harm to his employees. He notes that citations for COVID-19 exposure will rely on guidance the employer did not meet, including OSHA's.

Both OSHA and the CDC recommend employers adopt exposure control plans. (see next article for more detail)