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Thursday, Mar 28, 2024

COVID’s Long Tail

Employers can expect to deal with insurance repercussions from the pandemic for years to come, with more litigation on the way, and new occupational health lines popping up for folks that remain in work-at-home mode, brokers and attorneys told the Business Journal.Occupational insurance claims remain low, but for the unfortunate business that files a COVID-related workers’ compensation claim, that may blemish their record moving forward. Carriers have already begun denying some employers occupational health coverage because of a virus claim, according to Danone Simpson, chief executive of Montage Insurance Solutions in Woodland Hills.“We’re seeing carriers get a bit pickier because of the risk,” Simpson said. “We’ve seen workers’ comp carriers decline a risk in the service industry because of the potential of COVID.”Rates, on the other hand, are stable and brokers continue to be competitive, Simpson said.Work from homeWorkers’ compensation policies specifically for remote employees will provide more business for brokers and focus on home ergonomics, said Harry Nelson, partner at Nelson Hardiman Law Firm in downtown Los Angeles. Nelson Hardiman attorneys represent health care providers, including hospitals, throughout the nation.Work from home policies might hinge on ensuring employees have, at the very least, a proper desk, computer chair for posture and other necessities that would normally be available in an office setting.“How much are employers responsible, if they’re going to have part of their workforce working from home? I’m thinking of ergonomic injuries like carpal tunnel (syndrome). You had a massive amount of the workforce move to a home-based setting where they don’t necessarily have all the tools to make the workplace safe and healthy like they had before,” said Nelson.Nelson noted that writing policies in this context isn’t completely new, but this is the first time the nation has had this scale of people working from home for an extended period of time.“It’s a really underdeveloped area,” said Nelson. “We’ve always had people who telecommuted, and it’s always been the case that an employee injury is covered by workers’ compensation if it happened during the course of employment, regardless of where the injury actually occurred.”Added Simpson: “It’s harder to monitor for risk – namely the ergonomic risk of people that may not have a proper desk. It’s going to be very difficult.”It isn’t clear how claims would play out in court, Nelson added.“What’s a workplace injury if you work from home? If my kid spills their milk from their cereal and I slip in the kitchen, that’s not a workplace injury,” explained Nelson. “If the equipment my employer is providing me and expecting me to do my job on at home isn’t sufficient, and if I let my employer know I’m having some challenges in the house, I think it creates potential risk for employers that needs to be reckoned with.”Added Nelson: “We just saw tens of millions of Americans shift to telecommuting, to working from home, and making their home their work premises. We had so many people doing it that we’re going to start seeing a standard for what it means to create a safe workspace at home.”Travel liabilityInsurance executives expect business travel policies to be changed or tightened too to avoid liability in the post-pandemic economy, Simpson said.“We’ve had several of them contact us to review their travel policies because if an employee travels for work and they contract COVID-19 on an airplane, in a hotel, or anywhere within their duties from when they leave their home to when they return home … even if they’re out for business and they go out in the evening to a bar, they’re still on a work trip,” explained Simpson. “If they contract COVID-19, the employer could still be responsible for that.”Even people who were out-of-state but within the country weren’t cleared by their employer to return to the state, Simpson said, for fear of a claim. One client has had an employee stuck in Connecticut for more than a year, deeming it too risky to fly that individual back to California.“Even returning home for business is considered for business,” added Simpson. “Travel is a big thing and each state has its own COVID-19 rules of when you fly into that state.”Long-hauler litigationNelson foresees a “tug of war” between carriers, brokers, employers and regulatory agencies when it comes to responsibility for COVID long-haulers and future COVID-related occupational health claims.The term “long-haulers” refers to COVID patients who experience lingering symptoms from the virus long after they’ve stopped being contagious.“It’s a worrying point. You have a number of people with large workforces who have conditions that will require intensive treatment, cardio-pulmonary treatment,” said Nelson. “The cases that are the most extensive for workers’ comp are these catastrophic cases where you don’t know what’s wrong and you’re requiring more and more testing and more and more specialists. I think that’s definitely a fear.”Nelson anticipates new federal and state legislation and enforcement activity to streamline screening procedures for employees and guests, but he advised employers to regularly self-evaluate and pay attention to changing COVID policies related to occupational health.“Who’s responsible for all the prevention verification costs? How much are employers expected to cover — before even the (long-hauler) COVID — all of the costs involving employee testing and the cost associated with employee leave?” Nelson asked. “There are enormous costs in the workplace that will flow from this pandemic for years to come.”Employers have received a bit of respite from a potential surge in claims because of the Families First Coronavirus Response Act. The federal rule required employers with 500 or fewer employees to pay two weeks of sick time for a worker who contracted the virus, usually leaving no need to pursue a claim unless the illness continued past that timeframe.Simpson of Montage Insurance said the industry would face far more claims than they are now if this rule was not in place. President Joe Biden’s American Rescue Plan Act extended the rule through September.“What that did was it added a buffer because most of the cases ended after 10 days. It really ended up where there weren’t as many claims as you would have thought,” Simpson explained. “Some people had these after-effects, and those are the people that could end up in a longer claim – those are the ones that could be difficult.”Nelson echoed Simpson’s concern with long-hauler claims, adding that just like work from home policies, the sheer numbers of long-haulers can’t be written off by the insurance industry.“You’re taking young, healthy people who are in their 40s and 50s, for the cases that I know of, that didn’t have health issues before, active, athletic — all of a sudden they’re really hobbled. These are going to be very expensive cases,” he said.

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