Category Archives: Workers Compensation

Will Workers Comp Claims for COVID-19 Be Paid?


While health workers and first responders might be more likely to be exposed, whether COVID-19 is compensable under workers comp is uncertain.

Whether workers compensation claims related to COVID-19 will be paid is a question to be answered case by case and state by state.

The world has seen numerous epidemics whose impact on public health is well documented, so you might expect to find guidance on compensability from these experiences. But according to the National Council on Compensation Insurance (NCCI), “You would be hard pressed to find meaningful information on how or even if the workers compensation system was affected” by the SARS, H1N1, Ebola, and Zika outbreaks.

Workers comp insurance typically covers employers for employee claims regarding “bodily injury by accident or bodily injury by disease.” Many state statutes, however, exclude “ordinary disease of life.”

While some occupations – for example, health care workers and first responders – might be said to have a higher probability than others for exposure to COVID-19, whether the disease is compensable under workers comp is uncertain.

“’Would time away from work during recovery be considered ‘temporary disability’,”’ NCCI asks, “or is it just normal ‘sick time’?”

Guaranteed benefits for some

Workers’ comp insurers in at least two states have said they will guarantee benefits for health workers and first responders.

Kentucky Employers Mutual Insurance Co. said it will pay wage-replacement benefits for any first responder or employee in the medical field who is quarantined because of direct exposure to a person diagnosed with COVID-19. The announcement follows a decision by the Washington State Department of Labor and Industries to pay wage-loss and medical treatment expenses for any health care worker or first responder who is quarantined because of coronavirus exposure. Washington operates a monopoly workers comp system, so that policy affects every employee covered by the state system.

It remains to be seen if other states will take the same measures relative to workers comp. For general health insurance, however, NCCI says at least 10 states have issued mandates to cover COVID-19. The mandates vary, but they include coverage for testing and visits to emergency rooms or urgent care facilities either in-network or out-of-network without deductibles or copays.

If expanded to more states, NCCI says, these mandates could limit workers comp claims in cases where only testing or quarantine are necessary.

#WCRI2020: Post conference thoughts


WCRI policy analyst Vennela Thumula discusses trends in opioid use with Dr. Albert Rielly of Massachusetts General Hospital.

By James Lynch, Chief Actuary, Insurance Information Institute

It’s a heavy pour in first class on the train back from Boston (Woodford Reserve), but it lets me absorb the idea-heavy Workers Compensation Research Institute conference just ended.

WCRI’s annual confab is heavy with the kind of wonkery that you can’t confess secretly fascinates you. Triple-I’s Twitter account was laden (or, in my opinion, enlivened) last week with talk of, say, how often injured workers need a second operation for injuries in the lumbar region. (The answer is 11%, and it follows the rule of thumb that surgeons employ.)

So here are general impressions, though I’ll add (and be the first to every say): For more in depth analysis, see our Twitter feed. (@iiiorg – #WCRI2020)

Coronavirus. Not fair to lead off with something beyond organizers’ control, but talking about the current “Is It A Pandemic . . . Yet” is, these days, the ultimate icebreaker.

First, handshakes are out: how do you greet each other without spreading viral havoc? WCRI President and CEO John Ruser kicked off the meeting with several options:

– the elbow tap, a sort of twist at the waist, lunge and nudge. Seems safe, but isn’t that the same elbow you are supposed to sneeze into?

– the boot tap, which had a viral moment earlier this year – a sort of Irish step dance for the middle-aged.

the Wai bow, a Thai tradition which best resembles the yogi’s namaste, except standing. (It also has an emoji – 🙏.)

Elbow tap won out, and I suspect you will see lots of nuzzling elbows soon if you have not already.

Second, discussion of how this might disrupt said spring conference season. It was rumored – not confirmed – that the sponsoring Boston hotel had no more conferences in March, the rest being canceled. I’ve heard of sporadic cancellations, but nothing I’m attending has been called off as of March 9.

Medical marijuana. Massachusetts recently legalized recreational cannabis, and attendees seemed concerned how this will play out. The obvious concern – sky-high employees – but also the quackery. People self-medicate with substances containing CBD – marijuana’s nonhallucinatory ‘medication’ (the quotes meaning there’s precious little evidence it medicates against anything), but have no way of knowing what else lurks in the palliative – THC, leads, toxins?

This resonated with me, because as I made my way to Boston last week, I stopped at a small downtown that had a CBD shop. It was handing out samples.

Workers comp and the aging workforce. The first conference sessions addressed the generational shift. Opening speaker Jennifer Deal studies how Boomers, GenXers, Millennials and GenZ’s see the world. Her general conclusion: The generations are more alike than different, and many of the differences stem from differences in the perspectives of 30-, 40- and 50-year-olds.

The next speaker, WCRI’s Bogdan Savych, brought the workers’ comp wonk to the topic: The rate of on-the-job injuries declines after workers turn 65 – fewer overexertion claims, but more falls. Sprains decrease, so do cuts. But fractures increase.

And the cost per injury rises with age, no small thanks to that increase in fractures.

Indemnity payments decrease – because older workers who get hurt make less than younger injured workers.

Finally, older workers find it a bit easier finding medical professionals to treat them. This might reflect the differences in injuries – easy to find a doctor to treat a fracture or a cut – or it might mean older workers can better negotiate the medical system.

Opioids. The workers comp world can be justifiably proud of its efforts to reduce overprescription of opioids. WCRI researcher Vennela Thumula showed that opioid dispensing fell between 2014 and 2018 in all the states the organization studied.

They still got the same amount of pain treatment, more or less. In some cases, they got non-opioid pain medications, but that didn’t take up all the slack. There were also increases in behavioral medicine – approaches that help people deal with the pain rather than mask it.

There were also increases in chiropractic treatments and – at least in California – an increase in acupuncture.

Next year’s conference is March 24 and 25 in Phoenix.

Top 5 challenges for workers comp

The annual Focus on 5 survey by the National Council of Compensation Insurance (NCCI)  yielded the following issues that are keeping workers comp executives up at night:

  1. Will insurers be able to react quickly enough to preserve rate adequacy if loss costs start to rise after a sustained period of decline?
  2. How does an aging and changing workforce affect industry drivers like claims frequency and severity, along with wage and employment levels?
  3. What does the future hold for medical care costs, given variables like emerging healthcare technology and treatments, issues related to opioids and marijuana in the workplace, and mega-claims associated with seriously ill or injured workers?
  4. Will the gig economy ever grow to the extent that it affects workers comp premium levels? And will insurers develop innovative products to serve that market?
  5. How will rapidly changing workplace technology affect American jobs and the workers comp industry? Can regulation and legislation keep pace?

“It is critically important that we stay on top of the issues affecting our industry,” said Bill Donnell, NCCI president and CEO. “With a better understanding of the concerns of these leaders we can focus on key topics and provide insights that enable more informed decision making across the workers compensation system.”

 

Workers Comp 2019:
Sixth Straight Year
of Underwriting Profits

Private workers compensation insurers were slightly less profitable in 2019 than their 2018 record, according to a preliminary analysis by the National Council of Compensation Insurance (NCCI). NCCI estimates the combined ratio – a measure of insurer profitability – for 2019 will be about 87 percent, the second-lowest in recent history after last year’s record-low 83.2 percent.

These results, reflecting the segment’s sixth consecutive year of underwriting profitability, are part of NCCI’s State of the Line Report—a comprehensive account of workers’ compensation financial results.

 

Workers’ compensation net premiums written (NPW) fell 3.9 percent in 2019, to $41.6 billion from $43.3 billion in 2018, the report says. Before 2018, cession of premiums to offshore reinsurers stalled NPW growth.  But the Base Erosion Anti-Abuse Tax (BEAT) component of the Tax Cuts and Jobs Act of 2017 – which limits multinational corporations’ ability to shift profits from the United States by making tax-deductible payments to affiliates in low-tax countries – spurred NPW growth to almost 9 percent in 2018.

While the BEAT’s residual effect and the strong economy may place upward pressure on 2019 net premiums written, recent decreases in rates and loss costs are likely to more than offset these factors.

Changes in rates/loss costs impact premium growth and reflect several factors that impact system costs, such as changes in the economy, cost containment initiatives, and reforms. NCCI expects premium in 2019 to fall 10 percent, on average, as a result of rate/loss cost filings made in jurisdictions for which NCCI provides ratemaking services.

The State of the Line Report was presented at NCCI’s Annual Issues Symposium (AIS) in May.

Opioids and Workers’ Compensation

By Max Dorfman, Research Writer, Insurance Information Institute

As the opioid epidemic continues to roil the country, it’s easy to forget the number of issues that contribute to its severity. Indeed, for workers injured on the job, compensation can include opioid treatments—which can lead to opioid dependence. With this subject in mind, I spoke to Dr. Vennela Thumula, an author and policy analyst with the Workers Compensation Research Institute (WCRI), who was able to provide insight into opioid dispensing for injured workers.

This interview was modified for clarity.

What are you seeing as far as general trends in prescribing opioids for workers injured on the job, particularly as the opioid epidemic has become a more visible issue?

Our study – Interstate Variations in Dispensing of Opioids, 5th Edition – examined recent trends in opioids dispensed under workers compensation for workers from 27 states who had more than seven days of work loss due to their injury but who did not have a major surgical procedure related to the work injury.

Opioid dispensing to injured workers has decreased substantially in recent years in all 27 state workers’ compensation systems studied. Between 2012 and 2016 injuries followed for an average two years postinjury, the percentage of injured workers with prescriptions receiving opioids decreased by 8 percentage points (in Illinois) to 25 percentage points (in California). Among injured workers receiving opioids, the average morphine milligram equivalent (MME) amount of opioids dispensed per worker in the first two years of a claim decreased in nearly all study states, with 30 percent or higher reductions seen in 20 of the 27 states studied.

Which states are you still seeing higher-than-average prescribing rates for workers injured on the job? Why do you think these states are still seeing such high rates?

After the declines, opioid dispensing continues to be prevalent in some states. At the end of the study period, the percentage of injured workers with prescriptions receiving opioids ranged from 32 percent in New Jersey to 70 percent in Arkansas and Louisiana across the 27 states, and the average MME per worker in Delaware, Louisiana, Pennsylvania, and New York continued to be the highest among the 27 study states.

For instance, in Delaware and Louisiana, the average MME per claim was more than three times the amount in the median (middle) state and over five times that in the state with the lowest amount, Missouri. We should note that although New York is among states with the higher-than-typical amount of opioids, there were substantial decreases in opioids dispensed to New York workers over the study period. We should also caution that these four states have implemented other opioid reforms towards the end or after the study period whose impact could be monitored with more recent data.

I see non-pharmacologic treatments are being used more often for workers injured on the job. What are the most common non-pharmacologic treatments utilized under workers’ compensation?

We see that providers have switched from multi-pronged pain treatments, which involve pain medications (including opioids) and other restorative therapies, to a treatment protocol that more frequently relies solely on non-pharmacologic services. The most frequent non-pharmacologic services billed and paid under workers compensation were physical medicine evaluation; active and passive physical medicine services such as electrical stimulation and hot and cold therapies; and passive manipulations such as manual therapy and massage.

How are these non-opioid pain treatments changing the landscape of workers’ compensation for patients and insurance companies? Are these treatments now prioritized over opioids?

Our first look at the data suggests a shift in treatment patterns away from opioids to non-pharmacologic services, which conforms to the recommendations of opioid prescribing and pain treatment guidelines and policies implemented in a number of states. Many questions remain answered, including the impact of these changing treatment patterns on claim outcomes. We will be talking more about alternatives to opioids for pain management at WCRI’s 36 Annual Issues & Research Conference, March 5 and 6, 2020, in Boston, MA.

 

The gig economy’s impact on workers compensation insurance

 

Getty Images

The gig economy, or independent contract work has been around for centuries. Before the Industrial Revolution, and for some years after, most workers were self-employed or worked in small businesses.

Recently “gig work” has received a lot of buzz due to the rise of technology companies such as Uber, Lyft and TaskRabbit that electronically mediate contract work.

The National Council on Compensation Insurance (NCCI) closely examined the gig economy and nontraditional work arrangements in its 2019 Q2 Economic Briefing. Since workers in nontraditional arrangements rarely receive the same benefits as wage and salary workers, this issue has obvious relevance for workers compensation.

Some of the key takeaways from the Briefing include:

  • There is mixed evidence about the rise in alternative work. Large surveys have found little change in self-employment and alternative work in the last 10–20 years, but administrative data (such as tax records) shows these types of work arrangements are growing. The evidence suggests little change in the number of Americans in alternative work arrangements as their primary source of income but increasing numbers of people engaging in alternative work arrangements to generate supplemental income.
  • Today about 30 percent of adults in the U.S. are engaged in some type of informal or alternative work, and lawmakers continue to take notice and investigate ways to regulate workers and companies in this growing sector.
  • About 4.5 percent of households earned some income from electronically mediated work between April 2017 and March 2018—three times higher than the percentage in the first 12 months of the study period, October 2012 to September 2013. Two-thirds of this 4.5 percent had no income from electronically mediated work in the past month—most people only did electronically mediated work occasionally.
  • The risk of workers compensation leakage is likely to rise during and after the next recession, whenever that may occur. (Electronically mediated work was in its infancy during the Great Recession.) When firms shed payroll in a future downturn and workers have difficulty finding traditional jobs, then the labor supply for nontraditional work will increase. At the same time, cost-cutting firms will have incentive to experiment. If firms and at least some workers favor new arrangements, then payroll lost in a recession is likely to shift to nontraditional work during recovery.

 

 

I.I.I. Report: Patchwork of state marijuana laws causing headaches for employers, insurers

Today Illinois Governor J. B. Pritzker is reportedly going to sign into law a bill that legalizes recreational marijuana in the state. That makes Illinois the eleventh state (plus D.C.) to legalize marijuana for adult use.

Click to enlarge.

But as medical and recreational marijuana legalization spreads, concerns about what this means for workplace safety and workers compensation continue to grow. What is the impact of legal marijuana on workplace safety, employer duties and obligations and workers compensation insurance?

Today, the I.I.I. published a report that examines the current state of the issue. (Download the report here.)

Haze of confusion: How employers and insurers are affected by a patchwork of state marijuana laws” dives into the following questions:

  • How does marijuana intoxication work and how might it impact workplace safety?
  • What accommodations, if any, are employers expected to provide for workers that use marijuana?
  • Does workers compensation insurance provide benefits to injured employees testing positive for marijuana? What about reimbursement to injured workers for medical marijuana?

Unfortunately, none of these questions have straightforward answers. Every state’s laws and regulations governing these issues are different, not to mention that federal law prohibits marijuana outright. To complicate matters further, state laws and regulations are constantly changing. Employment and insurance activities once prohibited are often now permitted – or required.

Click to enlarge.

Legal marijuana isn’t going away. Employers and insurers will continue to grapple with a rapidly changing environment, perhaps for years to come.

To learn more, download the report here.

It’s safe to work in (not on) marijuana

There’s a pervasive myth out there that the marijuana industry is an unregulated Wild West populated by desperadoes and mountebanks out to score a quick buck.

But even a passing familiarity with how the industry operates in states with legal recreational and medical marijuana should be enough to dispel that myth. Marijuana operations are subject to extremely strict licensing requirements and regulatory oversight. Every player in the marijuana supply chain is tightly controlled – from cultivators to retail stores to, yes, the buyers themselves.

In fact, a recent analysis from workers compensation insurer Pinnacol Assurance suggests that the industry’s strict regulatory oversight may also be the reason why it’s a safe industry to work in.

Pinnacol’s analysis looked at Colorado claims data for marijuana workers. There were 350 injuries in 2018, most of which were strains, cuts, and slips and falls. Pinnacol concluded that the industry is relatively safe when compared to similar job-types in Colorado.

In addition to tight regulations, the analysis suggests that Colorado marijuana operators are also increasingly focused on safety and risk mitigation.

But working in marijuana is different from working on marijuana. Working stoned is probably a bad idea. You can read more about marijuana and employment issues here.

WCRI releases 2019 workers compensation law compendium

This week, the Workers Compensation Research Institute (WCRI) published its latest edition of workers compensation laws in the U.S. and Canada, which includes regulations and benefit levels as of January 1, 2019.

Per WCRI:

In Canada and the United States, workers’ compensation is entirely under the control of sub-national legislative bodies and administrative agencies. The differences between jurisdictional laws and regulations can be subtle and this survey gives you the ability to understand those differences.

WCRI members can download the report here.

For the more casual readers out there, check out our page on workers compensation and how it works.

The future of telemedicine and workers’ compensation insurance

You can’t talk about workers’ compensation insurance these days without mentioning “telemedicine” at least once. It should therefore come as no surprise that telemedicine was given its own panel discussion at the 2019 Workers’ Compensation Research Institute’s (WCRI) Annual Issues and Research Conference.

(In case you don’t know, the American Telemedicine Association (ATA) defines telemedicine as the “remote delivery of health care services and clinical information using telecommunications technology.” Think of an app that lets you video chat with a doctor, for example.)

The potential benefits of telemedicine to patients, providers, and employers could be immense. Improved access to healthcare services. Fast, personalized care. Treatment efficiencies. Reduced costs. Dr. Stephen Dawkins of Caduceus USA put it this way: “It’s crystal clear, as a provider, that telemedicine is a tsunami that will change the paradigm of medical care.”

Indeed, as Dr. David Deitz of Deitz & Associates noted, telemedicine is almost the perfect storm of improved healthcare services – and is already experiencing exponential growth in the commercial health sector. Citing the ATA, he noted that there were an estimated 1.25 million telehealth visits in 2016 alone – and that some sources estimate that over 400 million of U.S. medical visits could have been telemedicine encounters.

But has telemedicine made inroads into workers’ compensation?

Dr. Deitz pointed out that there is “essentially no quantitative data on [telemedicine] use in workers’ compensation.” Furthermore, he argued that there are several open questions when it comes to telemedicine: what are the appropriate regulations and reimbursement models? Is there a quality trade-off for telemedicine versus in-person encounters? Are there any privacy or cybersecurity concerns?

Kurt Leisure, vice president of risk services for The Cheesecake Factory, offered some preliminary answers when describing his company’s new telemedicine program for worker injuries, implemented in February 2018.

According to Leisure, the program basically works as follows. An injury occurs. If urgent, the injured worker proceeds directly to urgent care or the emergency room. If it’s non-urgent, the worker calls the company’s nurse triage system for preliminary care. If the phone call isn’t enough, the worker has the option of being escalated to a telemedicine program on their smartphone.

What have been the results so far? Generally positive, with the program leading to $153,000 in hard dollar savings in 2018. But Leisure did note that there are still wrinkles that need to be ironed out. Identification of telemedicine candidates during the triage phase needs improvement.  Employee trust in the program could also improve.

But the injured workers seem to approve of the program. “Overall, I’m really excited, there’s a lot of upside potential just in our initial program,” Leisure said. “I think it will explode over time.” One particular benefit of telemedicine could be keeping workers and employers out of the courtroom. “We think the litigation rate is going to drop significantly” with widespread and effective telemedicine, said Leisure.

Indeed, despite some open questions about workers’ compensation adoption of telemedicine, the panel agreed that the industry would benefit tremendously. “Telemedicine basically gives you a conduit through which you can achieve better case management,” said Dr. Dawkins.