Broker Check

Workers Compensation and COVID-19

July 13, 2020

Historically speaking, workers compensation has covered occupational diseases but not "ordinary diseases of life" not confined to the workplace. That has been changing, and COVID-19 has accelerated the process.

As described in a number of articles, most recently an IRMI commentary by Christopher Mandel, they has been a growing presumption of compensability for certain conditions in certain occupations. Police and firefighters have been given presumptions for heart disease and cancer. Now COVID-19 has resulted in states giving presumptions of compensability to "essential workers". Depending on the state, this may be only healthcare workers or extend to food store employees and others with extended exposure to the public.

The cost of these extensions is still to be determined. The National Council of Compensation Insurance (NCCI) estimates range from $2.78 billion to $81.5 billion. New York estimates costs of over $31 billion (353% of current annual costs) and California between $2.2 billion and $33.6 billion. Serious cases involving hospitalization could cost $100,000 and death benefits will be paid in some cases.    

The impact on the workers compensation system will be higher costs, which may lead some employers to pull out of states with generous payments. It also raises the question of whether workers compensation is going beyond its original purpose.