Covid-19 and the Workers’ Comp Question

From my article at Leader’s Edge Magazine

Some states have passed legislation or imposed regulations that would establish a presumption of workers compensation coverage for COVID-19 claims.

By mid-June, more than 2,800 federal employees filed workers compensation claims for contracting COVID-19 on the job, a number expected to double in a month.

Brokers may best be able to help on the risk management side at this point.

States Enact COVID-19 Workers Comp Legislation

More states are passing legislation and imposing regulations to mandate the presumption of workers compensation coverage for COVID-19, which experts say is unprecedented. Brokers and insurers say the overall situation is in a state of flux, but many predict there will be legal battles ahead.

Even the lowest of estimates of COVID-19 workers compensation claims could result in twice as many awards than in the previous year, according to the National Council on Compensation Insurance (NCCI), which analyzes workers compensation systems. For example, the Department of Labor reported in July that more than 2,800 federal workers had filed workers compensation claims for contraction of COVID-19 on the job as of mid-June, and DOL expected that number to double in a month. Families of 48 federal workers filed death claims with the agency’s Division of Federal Employees’ Compensation.

“The workers compensation system faces significant uncertainty in the years ahead because of the COVID-19 pandemic and resulting economic fallout,” according to Donna Glenn, chief actuary at NCCI, in a recent analysis. “Covid-19 is a shock to the industry, impacting almost every aspect of workers compensation,” the report says.

At a minimum, according to NCCI, “there is a reasonable likelihood for COVID-19 to result in significant [workers compensation] claims costs during the accident year 2020.”

NCCI has listed a wide range of possible workers compensation financial outcomes from the COVID-19 pandemic. For instance, claims payouts for the estimated 86.3 million workers covered by workers comp in the United States could range from $2.7 billion to $81.5 billion. An NCCI report also referred to a wide range of possible compensability rates of 20% to 60%.The presumption laws are creating lots of confusion and have preferred classes of workers,” Wilhelm says. “As the country opens up, it will raise the question of whether new COVID-19 cases arose out of employment risk.


With more people working from home, the overall number of workers compensation claims could fall. But Christine Williams, managing director for the Worker’s Compensation Center of Excellence at Marsh, says there might be “greater [COVID] claims frequency for some industries,” generating higher overall costs and even additional cost burdens of processing such claims. The industries most affected would be those that have continued operating throughout the pandemic.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s