The COVID-19 (coronavirus) pandemic has raised questions about the rules regarding workers’ compensation insurance coverage for workers who become infected with the virus at work.
Each state develops its own workers’ comp rules, requirements, and standards that are based on industry, occupation, and the size and structure of a business. Workers’ comp presumption laws—which presume that a worker’s injury or illness was acquired through their job—are being written in some states in response to the COVID-19 crisis.
Does workers’ comp insurance cover COVID-19?
In general, workers’ comp insurance doesn’t cover routine community-spread illnesses like a cold or the flu because infection typically can’t be directly tied to the workplace. However, during the COVID-19 crisis, many jobs that weren’t considered particularly hazardous before (grocery store workers, for example) have suddenly become potentially dangerous for employees. While workers deemed “essential” during this crisis may have a higher risk of exposure to the virus, more hazardous working conditions don’t guarantee that a COVID-19 infection will be covered under workers’ comp coverage in every state.
Recently, many states have passed or are working to extend workers’ compensation coverage for COVID-19 to first responders, healthcare workers, and in some cases, other workers deemed essential. What constitutes an essential worker is defined by each state—and varies widely across the states.
As of August 13, 2020, 14 states have taken steps to extend workers’ comp coverage to include COVID-19 as a work-related illness:
Six states have enacted legislation creating a presumption of coverage for various types of workers. Alaska, Minnesota, Utah, and Wisconsin limit coverage to first responders and healthcare workers, while Illinois covers all “essential” workers and Wyoming covers all workers.
Four states—Michigan, New Hampshire, New Mexico, and North Dakota—have used executive authority to implement presumption policies for first responders and healthcare workers.
Four additional states—Arkansas, California, Connecticut, and Kentucky—have taken executive action to provide coverage to first responders and healthcare workers plus other essential workers like grocery store employees who are presumed to have contracted COVID-19 at work.
In most cases, state rules have been amended so that COVID-19 infections in first responders, medical personnel, and—in some states—“essential” workers, are presumed to be work-related and therefore more likely to be covered under a workers’ comp policy. Some states have implemented a rebuttable presumption, which allows the employer and insurer to provide evidence that an infection was not work-related. Some employers and insurers have voiced concerns that presumption laws and orders will adversely affect insurance costs for employers at a time when businesses are already facing financial and workforce challenges.
Presumption laws in California
On May 6, 2020, California Governor Gavin Newsom was the first governor to create a rebuttable presumption for 16 classes of workers deemed essential. The executive order states that employees who test positive for COVID-19 are presumed to have contracted the virus in the course of employment for purposes of awarding workers’ comp benefits if certain requirements are met.
According to the order, any COVID-19-related illness that occurred between March 19 and July 5, 2020, is presumed to have arisen out of and in the course of employment if all of the following requirements are met:
The employee tests positive for or was diagnosed with COVID-19 within 14 days after he or she performed work at the place of employment and at the employer’s direction;
The day the employee performed work was on or after March 19, 2020;
The place of employment where the work was performed was not the employee’s residence; and
The diagnosis (as opposed to testing positive) was completed by a physician licensed by the California Medical Board and confirmed by additional testing within 30 days of diagnosis.
Remember that insurers—and employers—can dispute the presumption with other evidence. However, choosing not to accept COVID-19 claims from workers may be risky for employers in states like California with high litigation costs.
Experts report that as of August 13, 2020, COVID-19 claims aren’t dramatically impacting the workers’ comp system because most claims have a short duration and involve relatively inexpensive medical costs.
The National Council on Compensation Insurance is tracking how each state is handling COVID-19-related workers’ comp presumptions weekly and provides links to applicable executive orders.
Thanks for reading our article posted on August 13, 2020. Please note that this content is intended for educational purposes only. As the circumstance surrounding COVID-19 change regularly, you should refer to your state legislation and/or an advisor for specific legal counsel. If you’re a small business owner, learn more about workers’ compensation insurance or check your current rate in 3 minutes.