Navigating new risks in workers’ compensation

By |  March 10, 2022
Photo: shotbydave/E+/Getty Images

Says Daniel Free of Insurance Audit & Inspection Co.: “When employers restaff, they often take on new and inexperienced people. Because they lack the required skills and training, they end up getting hurt.” Photo: shotbydave/E+/Getty Images

Just as many employers are getting workers’ compensation premiums and related costs under control, the COVID pandemic is introducing new hazards to the regulatory terrain.

While claims are increasing for mental distress and pandemic-related accidents, state regulatory agencies are expanding coverage to a presumption of the workplace origination of infections, medical marijuana use and other novel areas.

“Workers’ compensation law is becoming more complicated for employers in many states,” says Jeffrey Adelson, general counsel at Adelson McLean. “The regulations are undergoing change all the time.”

Adelson and other attorneys cite these areas of concern:

• Presumption laws for COVID infections
• Costly “long COVID” care
• Mental health treatments
• Medical marijuana coverage
• Opioid effect on accidents
• Injuries by inexperienced replacement workers
• Independent contractor coverage
• Ergonomic injuries by home workers
• Comorbidities
• Mega claims

Many of these concerns arise from, or are worsened by, the pandemic.

“Recent regulatory and legislative trends at the state level continue to be led by COVID,” says Randy Sieberg, president of Workers Compensation Consultants. “Some states have enacted so-called presumption legislation to the effect that workers are presumed to have contracted their COVID cases at the workplace.”

Prior to COVID, Sieberg says the burden of proof was always on the injured worker for a workers’ comp claim. Now, it is often up to the employer to prove an infection happened somewhere other than the workplace.


Also looming are costly claims for so-called “long-haul COVID,” a term referring to illnesses that linger for years.

“I think it’s too early to tell what injuries or disease may ultimately result from COVID,” says Daniel Free, president and general counsel at Insurance Audit & Inspection Co. “The infections could have long tail effects. Consider what happened with asbestosis or black lung disease. There are still cases out there materializing even though the basic exposure was eliminated a generation ago. So I’m not sure I’m ready to close the door on COVID, even if we vaccinate everybody.”

On the plus side of the COVID equation, claims are not as common as feared.

“All the piles and piles of COVID claims people were expecting never really happened,” says James Moore, president of J&L Risk Management Consultants in Raleigh, North Carolina. “We were expecting six or seven times as many claims as we got in or that we know occurred.”

A big reason claims haven’t mushroomed is that most employers have gone out of their way to protect employees. Plus, many employees are still working from home, reducing their chances of exposure.

“Most employees are covered by some form of health insurance, so even if they can’t establish that it happened at work, they’re still covered,” Free says.

Another plus: Claims to date have not been all that costly.

“The average cost on COVID claims is less than $5,000,” says Dennis Tierney, national director of workers’ compensation claims for Marsh, the insurance broker and risk advisor. “In contrast, the average cost for a typical workers’ comp claim – combining medical and lost time – is about $20,000.”

Mental health

COVID led to other social conditions that affect workers’ comp. Among them is mental distress.

Sieberg points out that some states started to add workers’ comp coverage for post-traumatic stress disorder on the part of employees who were put into work environments that were never expected to be very hazardous but turned out to be so because of COVID. Examples of such jobs are those for which the worker interfaces with the public, but the regulations may embrace a larger universe as time passes.

Long absences from the traditional work environment can also lead to medical conditions.

“Mental health issues may increase among people who have been working from home for a long time without social interaction,” Moore says. “Facebook and LinkedIn only go so far. That may lead to the greater need for treatment and higher workers’ comp rates.”

A related problem: Employees who have migrated to home offices tend to grab the nearest desk and chair regardless of ergonomic concerns. Injuries result.

“Employees who work from home can have workers’ comp claims,” Free says. “If they can show that an injury was in the course and scope of their employment, it would be compensable. I could see an employer disputing it, but I don’t think it would go very far.”

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