Compensating for COVID: Pandemic trends in workers' comp.

• Author: Barbour, Tracy
• Position: INSURANCE

Workers' compensation insurance is designed to provide wage replacement and medical benefits to employees who become injured or ill "arising out of and in the course of employment." In exchange, employees relinquish their right to sue their employer for the act--whether intentional or accidental--that caused them harm. This trade-off, known as the compensation bargain, helps cover the employees' medical expensesandlostwages while providing the employer legal protection against litigation for additional damages. The workers' comp system, which also includes disability payments to injured workers and death benefit payments to families, is seeing the initial impact of COVID-19 as the pandemic enters its third year. The lingering physical and mental effects have caused some employees to delay returning to work, modify their duties, or work remotely. Many employers are adjusting outside the workers' comp system to accommodate employees' health issues, which can include fatigue, pain, brain fog, anxiety, and depression. While the pandemic is starting to have a perceptible effect on the workers' comp industry, its broad impact may not be evident for years to come.

Compensability Issues

A major question around COVID-19 and workers' comp involves whether contracting the virus is compensable or eligible for repayment under state workers' comp acts. The answer is maybe. Workers' comp laws provide compensation for occupational diseases that arise out of and in the course of employment, but many state statutes exclude "ordinary diseases of life" such as the common cold or flu, according to the National Council on Compensation Insurance (NCCI), a nonprofit data collection bureau that specializes in workers' comp. But some occupational groups like healthcare workers arguably have a higher probability for exposure and, thus, a better chance at making a successful workers' comp claim.

The compensability of COVID-19 is being tested in litigation nationwide. For example, NCCI's November 2021 Court Case update indicates that the Superior Court of Delaware ruled in the case of Ingino-Cacchioli v. Infinity Consulting Sols that a surviving spouse of an employee who contracted COVID-19 while at work needs to file a workers' comp claim before filing a tort suit against the employer. And in the case of See's Candies, Inc. et al. v. Superior Court of Los Angeles County, California's Second Appellate District court is exploring whether the workers' comp exclusive remedy would prevent a lawsuit from a See's Candies employee who alleges that the candy maker's failure to implement sufficient safety protocols caused her to contract the virus, leading to her husband's eventual death from COVID-19.

From a practical standpoint, if someone alleges that they caught COVID-19 at work, they have a right to make a claim, says Johanna Kalal, associate claims executive at the Anchorage office of Parker, Smith & Feek, an insurance and risk management brokerage...