Virtually no aspect of modern life has been left untouched by the COVID-19 pandemic. Not even the workers' compensation system. Unfortunately, COVID-19 has introduced new uncertainties relating to workers' comp policies, liability, and even annual premiums. It is not a pretty picture.
You might have clients already worried about workers' comp for 2021. They are looking for answers that you are not able to give. As a benefits professional, prepare yourself for a slew of workers' comp questions in the coming months. Your clients are going to need some direction as they attempt to navigate rising costs and new requirements.
A Potential New Liability
At the heart of all the uncertainty are fears that COVID-19 will introduce an entirely new liability for employers. Up to this point, employers have not been considered liable when employees come down with the flu, the common cold, etc. The reason is simple: there is no way to prove the origins of a sick employee's illness. An employee could have picked up a virus at the grocery store as easily as picking it up at work.
The COVID-19 pandemic has caused a shift in how we view illnesses. Thanks to contact tracing, we are now being led to believe that it is possible to figure out exactly how and where people contract coronavirus. Even though the scientific veracity of contact tracing is still a matter of debate, there is always the chance that states will adopt new rules that classify COVID-19 as a workplace disease covered by workers' comp.
New York State has already begun looking into the issue. A recent legislative analysis determined that establishing COVID-19 exposure as an occupational hazard could add some $31 billion to the cost of the state’s workers' comp system.
Employers in the Empire State have very good reason to be worried. State government has already shown a willingness to go to great extremes to deal with the pandemic, and it would not be surprising to see them classify coronavirus exposure as a workplace hazard. If they do, employers will bear the brunt of the increased costs through higher workers' comp premiums.
What You Can Do As a Broker
We are still too early in the discussion to know what is going to happen with workers' comp in relation to COVID-19 liability. As a broker, check with each of your carriers to find out if they have any plans for dealing with increased claims resulting from the pandemic.
From there, you can:
- Start Planning – Work with your clients to come up with a plan for addressing increased claims. This may involve acting as a liaison between employers and carriers.
- Encourage Telehealth – Start encouraging your clients to encourage their employees to make better use of telehealth. Regular use of telehealth resources can help control costs in the midst of more claims.
- Encourage Communication – Also start encouraging your clients to maintain regular communication with sick and injured employees. Regular communication demonstrates that employers care. It can relieve worker anxiety and, as a result, reduce the number of claims filed.
- Educate and Train – Make a point of educating and training clients in prevention. Any steps they can take to prevent the spread of COVID-19 in the workplace ultimately reduces the likelihood of COVID-19 -related insurance claims.
Uncertainty abounds in the workers' comp environment thanks to the impacts of COVID-19. It is still too early to tell how all of this will play out, but it's best for brokers to start engaging now. Do not wait for a full-blown disaster before making some kind of move.