By: Robert Holden Senior Vice President and Principal
As states work to rebound from the economic effects of COVID-19, employers looking to reopen their businesses must still contend with the safety of the workers they’re trying to bring back and the potential liabilities they may face for making the wrong decisions. State and federal governments are looking for ways to address these concerns both by directly limiting employers’ liabilities, while simultaneously making sure workers are properly protected. Workers’ compensation insurance has been a traditional vehicle to protect workers from harm, but not when it comes to a pandemic. As employees return to work, new questions will arise with potential infections. Did a worker contract COVID-19 at the workplace? If it can’t be established where they were exposed, is the employer liable? These and other issues have risen to the forefront of the national discussion, especially as reopening plans accelerate.
Many of our clients and those in the business community are currently under a “closed” order from the governor of our state. But if a business reopens the first day that order is lifted and an employee then contracts COVID-19, what are their rights as an employee and what is the business’s obligation as an employer to cover any medical expenses and missed time at work? These questions are part of the fluid debate on these issues around the country.
While direct liability limits have been rare to date, workers’ compensation insurance is an active area for policymakers. Often referenced as the “grand bargain,” workers’ compensation systems, regulated by the states, protect workers, granting them immediate healthcare upon injury at work without having to wade through the legal process of suing an employer. Employers are also protected because they do not get sued for the injury, and the injury is a claim on their insurance. What is strikingly different about our current situation is that communicable diseases, like COVID-19, are not covered under workers compensation plans, therefore employees, employers and state governments are assessing what exemptions or modifications should be made to these plans. Increasingly, states are allowing for the presumption that a COVID-19 infection is a workplace injury.
As states face reopening at varying times and under various conditions, the National Conference of State Legislatures has already reported on states that have taken measures to address liability and workers compensation.
While a handful of states (Alaska, Minnesota, Utah, and Wisconsin) have enacted legislation to protect first responders and healthcare workers through workers compensation, abbreviated state sessions and the quick moving nature of the COVID crisis has caused more states to take executive action. Arkansas, Florida, Kentucky, and Washington state executive orders cover have extended protection to first responders and healthcare workers, and New Hampshire’s executive order covers first responders only.
Other states have aggressively acted to extend protection to a broader set of employees. Also through executive order, California’s Governor expanded coverage to all workers who test positive for COVID-19 who are not exclusively working from home. Similarly, New Mexico’s executive order defined its scope as workers who are at a greater risk for exposure to COVID-19 than the general public due to the nature of their work, and North Dakota issued an order expanding coverage to all essential workers.
As legislatures come back online, states are again looking to codify these policies. California’s Legislature is considering a number of bills to aimed to cover workers employed to combat the spread of COVID-19, effectively extending the impact of the executive order. While legislation in Louisiana, Massachusetts, Michigan, New Jersey, New York and Ohio is aimed to expand coverage to all essential workers. Also, Michigan, Pennsylvania, South Carolina, North Carolina, and Vermont have sought to extend protections to specific workers.
As this issue develops, there are a few key factors to keep in mind:
1. This is an unprecedented scenario for the country’s workers compensation plans. There has never been a demand on liability for employers like the one our nation is currently facing. In California alone, the projected worst-case scenario cost for covering workers could be over $33 billion.
2. There are two different current approaches to qualifying for COVID-19 compensation.
- A rebuttable presumption that COVID-19 infections at work are compensable under specific circumstances which could be denied with evidence to the contrary. This is the model California Governor Gavin Newsom is following in his executive order.
- A conclusive presumption, under which there is no option to contest by the employer.
3. Liability concerns for employers need to be addressed. No matter what states decide to change regarding workers compensation, businesses will need to stay a step ahead of the potential ramifications well into the future. Will premiums increase? Will exemptions have an expiration? If COVID-19 qualifies, will future communicable diseases such as influenza follow?
As you consider these issues, Stateside’s expertise can be a resource. We are tracking what is happening in all 50 states as well as federally to prepare and inform those who are making the challenging decisions about reopening their businesses.
Robert Holden provides our clients with healthcare advocacy consulting, strategic planning and Groups engagement support. As senior vice president, he manages Stateside’s Health Care practice, working with clients and stakeholders to help them articulate their policy aspirations, communicate how they serve healthcare consumers, and explain how new or changed regulations may affect their operations and the public good. Complete bio here.