CORONAVIRUS AND
WORKERS' COMPENSATION

A pandemic is defined as an outbreak of a disease that occurs over a wide geographic area and affects an exceptionally high proportion of the population.

 

DETERMINING WHAT'S COMPENSABLE

Two tests must be satisfied before any illness or disease, including coronavirus, qualifies as occupational and thus compensable under workers' compensation:

  • “The illness or disease must be occupational,” meaning that it arose out of and was in the course and scope of the employment; and
  • “The illness or disease must arise out of or be caused by conditions peculiar" to the work

Whether an illness arises out of and in the course and scope of employment is a function of the employee's activities. The simplest test for determining whether an “injury arises out of and in the course and scope of employment" is to ask: Was the employee benefiting the employer when exposed to the illness or disease? Be warned, this test is subject to the interpretations and intricacies of various state laws.

Qualifying as “occupational” is the relatively low hurdle. The higher hurdle is whether the illness or disease is "peculiar" to the work. If the illness or disease is not "peculiar" to the work, it is not occupational and thus not compensable under workers' compensation. An illness or disease is "peculiar" to the work when such a disease is found almost exclusively in workers in a certain field or there is an increased exposure to the illness or disease because of the employee's working conditions.

For example, black lung disease in the coal mining industry is a disease that is "peculiar" to the work of a miner. Coal miners are subject to prolonged exposure to higher-than-normal concentrations of coal dust leading to black lung disease. This makes the disease "peculiar" to the coal mining industry.

Another example of an exposure "peculiar" to the work is a healthcare worker contracting an infectious disease such as HIV or hepatitis as a result of contact with infected blood. The worker's unusual or "peculiar" exposure to such diseases results in an illness that is occupational and compensable.

 

EACH CASE IS JUDGED INDEPENDENTLY

Qualifying an illness or disease as occupational and, more importantly, peculiar to the work (and thus compensable) may ultimately require industrial commission or court intervention to sort medical opinion from legal facts. No one test is available to declare an illness or disease compensable or non-compensable; each case is judged on its own merits and surrounding circumstances.

Concluding that an illness is occupational, peculiar to the work and ultimately compensable is not necessarily based on the disease in question but on the facts surrounding the worker's illness. Factors investigated and considered by medical professionals and the court include:

  • The timing of the symptoms in relation to work: Do symptoms worsen at work and improve following prolonged absence from work (in the evening and on weekends);
  • Whether co-workers show or have experienced similar symptoms;
  • The commonality of such illness to workers in that particular industry;
  • An employee's predisposition to the illness (an allergy or other medical issue); and
  • The worker's personal habits and medical history. Patients in poor medical condition (overweight, smokers, unrelated heart disease, etc.) and/or with poor family medical histories may be more likely to contract a disease or illness than others in similar circumstances. Bad habits and poor medical history (and heredity) cloud the relationship between the occupation and the illness. For example, smokers may be ill-equipped to fight off the effects of illnesses to which others may have no problem being exposed.

 

PAID FURLOUGHED WORKERS IMPACTED BY WISCONSIN EXECUTIVE ORDER #72

The Worker’s Compensation Division recently released public information related to COVID-19 regarding those businesses that have employees on paid furloughs that are generating payroll with no correlating work comp exposure. In reality, employees are being paid but not working. To allow for this to be reflected in a business's work comp premium, an additional work comp code (0012) has been approved. This work comp code can allow for furloughed payroll to be deducted off gross payroll during the audit process. 

The Wisconsin Compensation Rating Bureau (WCRB) has created an FAQ document as it relates to Paid Furloughed Workers.  The document was specifically created for Paid Furloughed Workers impacted by Gov. Evers’ Executive Order #72. 

The key points of the document:

  1. A new WC code, 0012, is being created for Paid Furloughed employee payroll. 
  2. Separate, accurate, and verifiable records must be kept to substantiate the amount of paid furlough employee payroll.
  3. If an employee works part of the day, the entire payroll for the day is not eligible for WC code 0012. No division of payroll for that day is permitted.
  4. If accurate,verifiable payroll records are not maintained, 100% of the wages are assigned to the employee’s normal classification.
  5. The rate for WC code 0012 is $0.00.
  6. In the case of COVID-19, the use of WC code 0012 is directly linked to Governor Evers’ Executive Order #72, which is effective March 17, 2020, through April 24, 2020. This period could be changed based on any update to the executive order.

In order to take advantage of the special rate approved by the Office of Commissioner of Insurance, employers will need to keep detailed records of all payroll, particularly the payroll paid for which no work was performed. No immediate change is required on your policy at this time. The credit can be picked up at the time your audit is completed. Documentation of the furlough generated payroll will be required.

Wisconsin was one of the first states to respond from a Workers Compensation standpoint. In Iowa, Workers Compensation is managed by the NCCI. As of Tuesday, NCCI had not adopted an approach similar to Wisconsin. Here’s a link to its latest FAQs.

We will follow up when more details arise from other states that impact your workers’ compensation.

 

NATIONAL COUNCIL ON COMPENSATION INSURANCE (NCCI) PAID FURLOUGHED WORKERS

In Iowa and Illinois, workers’ compensation is managed by the NCCI. They have now proposed updated filings in an effort to address the impact of the COVID-19 pandemic on workers’ compensation rates. The key points of their proposed changes are similar to the changes made in Wisconsin by the Wisconsin Worker’s Compensation Rating Bureau.

  • If approved, a new statistical code, 0012, would be created for paid furloughed employee payroll. Under this statistical code, the payroll will not be used in the calculation of premiums.
  • The proposed change will have a retroactive effective date and is expected to be linked to the beginning of the federal state of emergency.
  • The details of the proposed rule changes will be included in a filing that will be submitted to state regulators in all NCCI states. Additional details should be available in the near future.

TRICOR Insurance is here to help. We’ve gathered business resources, and if you have any immediate questions, please reach out to your agent or account manager.

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