Questions remain over effect of COVID presumption laws

Presumption laws for essential workers who acquire COVID-19 may have less of an impact than anticipated on the workers compensation system, but whether it will lead to an increase in claims workers compensation payouts is up for debate, said a group of panelists Thursday at Business Insurance’s webinar, Workers Compensation: Presumption & COVID-19.

Workers compensation presumption laws, which presume that a worker’s injury or illness was acquired in the course and scope of employment, have typically been limited to occupational cancers in firefighters or post-traumatic stress disorder in first responders. However, California, Illinois and Vermont have extended rebuttable presumptions via executive order or legislation to essential workers who contract COVID-19.

The question is whether these laws are beneficial to the worker, employer and insurer or a hindrance, and whether they will lead to an increase in coronavirus workers comp claims.

On June 5, Illinois Gov. J.B. Pritzker signed into law a rebuttable presumption for customer-facing workers who acquire COVID-19.

“(The presumption) was a concession, at least in our state, to incredibly strong labor unions,” said Rich Lenkov, capital member and head of the workers compensation practice at Bryce Downey & Lenkov LLC in Chicago. “We already have a basis for workers to prove their case — it’s called the Illinois Workers Compensation Act. We don’t need to create a separate class of people, especially given the basic understanding of how difficult it is to prove causation. I don’t think a rebuttable presumption is necessary.”

“Much of presumption is really an effort to, in many ways, assuage the societal conscience of providing easily accessible benefits,” said John Hanson, an Atlanta-based senior consultant with Willis Towers Watson PLC. “They’re designed for the right reason just not the right methodology to provide a solution.”

California Gov. Gavin Newsom was the first to create a rebuttable presumption for 16 classes of workers deemed essential through an executive order issued May 6. The order, which retroactively applied to workers who acquired coronavirus on or after March 19, expired July 5. Several bills re-creating that presumption have been proposed in the state’s legislature.

The state was also one of the first to address occupational disease in the context of workplace injury in 1920 around the acquisition of the Spanish flu by a hospital worker in San Francisco v. Industrial Accident Commission, noted Jeff Adelson, Newport Beach, California-based partner with the workers comp defense firm Adelson McLean P.C.

“They wanted to decide whether or not disease could really be a source of harm and come into the framework of industrial injury … (and) whether or not somebody who got the disease was at a greater risk than the general public,” he said. “Arguably, if you’re an essential worker, you have greater exposure.”

In Illinois, case law to rebut a presumption claim, however, requires “the bare minimum” of evidence from employers, which will make it very difficult for workers to succeed on COVID-19 claims, Mr. Lenkov said, noting that many of his clients stated that they do not intend to pay those claims even if litigation costs more.

“Yes, it costs maybe a little bit of money to litigate them, but you have to decide whether fighting the case is of value because you can be guaranteed for every case you accept you will see some others filed as well,” he said.

In California, litigating these claims is more expensive, and choosing not to accept COVID-19 comp claims from workers may be riskier for employers because of higher litigation costs and the potential ramifications if a worker ends up with a serious case of coronavirus that requires hospitalization, Mr. Adelson said.

“A year later, they go file a workers comp claim and it is presumed compensable,” he said. “Not only are you faced with the presumably compensable claim, but all of a sudden you may be hit with an extremely large lien from the hospital, the doctor, the state.”

As science continues to evolve around the longer-term effects of COVID-19, Mr. Adelson also predicts that workers comp claims will see body parts added on, such as injuries to the lungs, respiratory systems, circulatory systems, as well as psychological claims.

“It’s really up to the employer and carrier to get on every one of these cases quickly,” he said. “We have the benefit in California of utilization review and have the ability to put the brakes on potential medical costs in these cases. Move forward, resolve the case, get it out of the way.”

Even with the rebuttable presumption in his state, Mr. Lenkov recommends the opposite approach, noting that many plaintiffs’ attorneys are not interested in taking these cases because most COVID-19 claims are small, and their payouts will be minimal.

So far, COVID claims are not having a dramatic impact on the workers compensation system because of their short duration and relatively inexpensive medical costs for most claims, said John Hanson, an Atlanta-based senior consultant with Willis Towers Watson PLC.

However, he argues that these cases — along with rebuttable presumptions for occupational cancers and mental health claims — don’t belong in the workers compensation system in the first place.

“Litigation rates for presumption cases relatively high … there’s a lot to learn from other presumptions both in the judicial system and the comp system,” Mr. Hanson said. “The question is, is workers compensation the correct spot for the management of COVID claims? (States may) try to determine if there is a better way to manage these claims without having to drive them … into the comp system.”

This article was first published in Business Insurance.

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