Health-care workers and emergency responders will benefit
from rules eased in some states around workers’ compensation that will allow
them to collect benefits if they can prove they caught Covid-19 on the job, Bloomberg
But employers need to be aware of the changing rules and be
prepared for the likely end result—skyrocketing premiums.
State workers’ compensation boards around the country are
amending rules for benefits payouts to include health-care workers exposed to
the virus and then quarantined. Attorneys are keeping a close eye on the
questions, such as who should be eligible to receive benefits, how does a
worker prove they caught Covid-19 on the job, and how will an influx of
successful claims affect businesses’ premiums to insurance carriers.
Some say essential workers like grocery store employees and
delivery workers also should qualify.
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
If expanded to more states, NCCI says, these mandates
could limit workers comp claims in cases where only testing or quarantine are
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
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.
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
Next year’s conference is March 24 and
25 in Phoenix.
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:
Will insurers be able to react quickly enough to preserve rate adequacy if loss costs start to rise after a sustained period of decline?
How does an aging and changing workforce affect industry drivers like claims frequency and severity, along with wage and employment levels?
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?
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?
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.”
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.
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, 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.
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.
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.
Legal marijuana isn’t going away. Employers and insurers will continue to grapple with a rapidly changing environment, perhaps for years to come.
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.
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.
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.