7/22/2020 | This week in Business Insurance Workers Compensation… – Editor
7/22/2020 | This week in Business Insurance Workers Compensation… – Editor
By Angela Childers
While many employers are eager to open their doors after months in lockdown to quell the spread of COVID-19, myriad questions remain regarding how to navigate the inevitably changed workplace and protect the safety and health of workers and customers, experts say.
Enabling workplaces to come back safely is a national concern, said Lorraine Martin, president and CEO of the Itasca, Illinois-based National Safety Council. “Businesses need to do the best they can using the data that’s available right now. It’s really important for us to look at (each industry) uniquely.”
Essential businesses, such as pharmacies and grocery stores, remained open while trying to implement safety measures during the nearly nationwide pandemic shutdown. Many states began lifting restrictions on non-essential businesses last month and further loosening of restrictions is expected.
For many industries, including construction, the workplace has “absolutely changed 100% across the board,” said Pittsburgh-based Carl Heinlein, senior safety consultant for the American Contractors Insurance Group. “Now, before you come onto a project, you’re going through a health assessment, and in many cases that will include a temperature reading, and you’re probably going to go through some sort of re-education or toolbox talk discussion about social distancing.”
Contractors have a lot of questions about how they can restart projects while preventing workers from being exposed to COVID-19. They’re grappling with such issues as how to get workers through the gates and to work safely, a process that used to take 15 minutes and now can take several hours, Mr. Heinlein said.
The industry is also putting much more emphasis on safety and hazard awareness training, emergency preparedness, and hygiene and sanitation.
“We’re already hearing that increased hygiene, sanitation and social distancing are all being implemented on sites,” said Kaileigh Bowe, vice president of Naperville, Illinois-based Highland Insurance Solutions, a subsidiary of WNC Insurance Services Inc.
Many are using or planning to implement technology to monitor distancing and for contact tracing, said Cheri Hanes, Dallas-based construction risk engineer for Axa XL, a unit of Axa SA.
For instance, Proxxi Co. in Vancouver, British Columbia, modified its wristwatch-like technology created to prevent electrocution to alert workers when another person is within six feet. Norwalk, Connecticut-based Triax Technologies Inc. is using devices mounted on hardhats as contact tracers, so if a worker tests positive for coronavirus, other workers who had been in close proximity to that individual can be quickly identified. Smartvid.io Inc., based in Cambridge, Massachusetts, has created a module for onsite cameras to identify when workers are violating social distancing and other safety rules.
Landscape different for retail, restaurants
The workplace for retailers and restaurants will also look much different.
“Retail has been a little bit of a challenge for us,” said Larry Sloan, CEO of the American Industrial Hygiene Association in Falls Church, Virginia. Physical distancing in stores, particularly smaller ones, will be difficult, and there is also the risk of disease transmission on merchandise. Currently, the AIHA is recommending that retailers temporarily eliminate changing rooms, and if they allow for returned items, to place them in quarantine, he said.
“The concern with restaurants is that you have potentially greater contact between the wait staff and the customer,” he said. To mitigate that exposure, he said, restaurants will need to consider adopting policies such as reservation-only dining, limiting groups to six people, asking customers to wait outside or in their vehicles until their tables are ready, using partitions to create additional barriers between workers and diners and between diners themselves, and displaying signage vetted by legal counsel that outlines the steps the establishment is taking to protect the health of its employees and the public, Mr. Sloan said.
The meatpacking and poultry processing industry — which was ordered to remain open in an April 28 executive order by President Donald Trump — has been hard hit by COVID-19 and is grappling with ways to protect workers from the virus. Thousands of workers at more than 100 plants in the United States have tested positive for the virus, according to the U.S. Centers for Disease Control and Prevention.
Although the CDC and the U.S. Occupational Safety and Health Administration issued temporary guidance for the industry, which includes temperature checks, staggered shifts, social distancing on lines and providing personal protective equipment, the guidance was voluntary as of May. It is unknown whether the government will police adherence to the guidance and what limitations of liability may be applied, said Melanie Neumann, Chicago-based executive vice president and general counsel of Matrix Sciences International Inc., a food production advisory firm.
But plants that fail to follow the advice could be cited for violation of the OSHA general duty clause, which may be invoked when a serious hazard is recognized but no applicable regulation exists, said Eric Conn, founding partner of Washington law firm Conn Maciel Carey LLP.
With all of the uncertainty, employers in food-processing plants as well as other industries would be wise to appoint someone as a “COVID czar” responsible for staying on top of new pandemic guidance, conducting regular risk assessments and implementing controls to prevent the spread of the virus, Ms. Neumann said.
Provide education for workers
Regardless of the industry, employees need to be educated about COVID-19 and how to use personal protective equipment, such as face masks, said Diana Stegall, Tucson, Arizona-based president of the American Society of Safety Professionals.
Employers should help workers understand why there is a need to wear personal protective equipment, how to obtain the equipment, how to remove it properly at the end of a shift, and how to clean it on a regular basis to avoid bacteria buildup, she said.
“One of the biggest mistakes an organization can make is to assume that employees are educated about COVID-19 and know what to do in the event of exposure or diagnosis,” said Eric Glass, Franklin, Tennessee-based senior risk and safety advisor at safety science company UL LLC. “Educating your employees should be an ongoing, never-ending effort, even after this pandemic is over.”
If an employee does receive a COVID-19 positive diagnosis, the company should have a “situational matrix” that outlines the internal actions that should be taken, which may include notifying other employees that may have been exposed to someone who tested positive, and cleaning and disinfecting work areas, Mr. Glass said.
“OSHA has relaxed its guidance on recordkeeping of COVID-19, especially in areas where there is wide community spread,” Ms. Stegall said. “But that doesn’t mean in the insurance world that it’s not covered.”
OSHA still requires employers to take reasonable efforts, based on the evidence available, to ascertain whether coronavirus cases reported by employees are work-related, under revised guidance that took effect May 26. Confirmed cases of COVID-19 requiring medical attention beyond hospitalization or days away from work and are determined to be work-related must be recorded on the employer’s OSHA 300 log.
Employers should also talk with their third-party administrator or investigators to find out what guidance they have for policyholders and how to handle claims of COVID-19 infections by employees, said Jeff Adelson, co-managing shareholder of Newport Beach, California, law firm Adelson McLean APC.
“If someone comes to you and says, ‘I have the virus,’ seek guidance from the workers comp carrier — don’t hide it,” Mr. Adelson said. “Putting your head in the sand is not going to help.”
Employers that fail to put into place policies to protect workers could be opening themselves up to serious and willful misconduct claims — regardless of whether the worker files a comp claim, he said.
“Every employer needs to ask themselves, ‘Is my business complying with the requirements of the reopening order?’” Mr. Adelson said. Although an employer may still see workers comp claims for COVID-19, “as long as you follow the law … the likeliness of getting a serious and willful claim is remote.”
Workplaces also should examine more subtle issues, such as how many people can enter an elevator, how to accommodate the volume of workers needing a temperature check at the start of a shift, and whether to shift employees’ workdays to reduce exposure, Ms. Martin said.
“One of the other pieces you have to address … is employee stress and their mental and emotional needs as well,” Ms. Martin said. “People are going to have questions. … Have some resources to help folks navigate that.”
Employers also need to ask themselves why they believe bringing workers back to the workplace feels right for the safety and health of the organization.
“Make sure you’re communicating with your team why they’re going back,” Ms. Martin said. “We like clarity. We like to understand, especially if there’s fear.”
By Angela Childers
The dependents of essential workers in New Jersey who die from COVID-19 in the course of employment may receive enhanced benefits if a bill that passed the state’s Senate becomes law.
The New Jersey Senate passed bipartisan bill S.B. 2476 in a 38-1 vote Monday. The legislation would provide the dependents of essential workers who died after March 1, 2020, due to the contraction of coronavirus on the job with enhanced weekly supplemental benefits from the state’s Second Injury Fund.
Essential employees include fire, police and other first responders; medical and other health care service providers; public-facing workers providing transportation or financial services; those involved in the production, preparation, storage, sale and distribution of essential goods; and other employees deemed essential in the state of emergency.
The supplemental benefits are intended to mirror cost-of-living-adjustment benefits in place for dependents of public safety workers killed in the line of duty. The additional benefits would be paid during the period in which the dependents receive the initially awarded weekly benefits and would be reduced accordingly for dependents receiving Federal Old-Age, Survivors’ and Disability Insurance Act benefits.
If signed into law, the legislation would take effect immediately.
The bill has moved to the state’s Assembly. A similar bill, A.B. 3998, was introduced to early May and has been in the Assembly Labor Committee.
By Louise Esola
As of 2020 most states have regulations on prescribing and managing opioids, but fewer than half have in place such protective measures as drug formularies and mandated drug rehabilitation, according to a report released Tuesday by the Workers’ Compensation Research Institute.
Researchers with the Cambridge, Massachusetts-based organization gathered data from all 50 states on recent laws, prescribing guidelines and such programs as prescription monitoring for controlled substances to measure how states have been managing the opioid crisis and the emergence of medical marijuana laws.
The report found all but six states have limits on how many opioids can be prescribed and for how long. All but one state has in place a statewide, mandated prescription drug monitoring program; Missouri made its PDMP optional, but data shows that 80% of the state’s population lives in a municipality that keeps track of prescriptions, according to the report.
While most states have in place prescribing guidelines, only 15 have drug formularies, or approved drug lists, for workers compensation, according to the report.
The report also shows a lag in drug abuse treatment options, as only 17 states definitively include “mental health services” for “drug rehabilitation” in workers comp statutes.
By Angela Childers
A circuit court denied on Thursday a petition filed by labor unions that would have forced the U.S. Occupational Safety and Health Administration to issue an emergency safety rule to address COVID-19.
A three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia Circuit unanimously denied the petition filed by the AFL-CIO, holding that OSHA “reasonably determined” that an emergency temporary standard to prevent workers from occupational exposure to COVID-19 was “not necessary at this time.”
The AFL-CIO filed a lawsuit against OSHA May 25, asking the court to compel the agency to issue an emergency temporary standard to protect workers from coronavirus. The union, along with nearly two dozen other unions and employment groups, had already petitioned OSHA directly about a COVID-19 standard. While the agency has released industry-specific guidance for a variety of industries, the guidance is not enforceable.
The court’s brief order noted that OSHA may issue an emergency temporary standard “if it determines that employees are exposed to grave danger from a new hazard in the workplace” and that the agency was “entitled to considerable deference” in this regard.
The principal deputy assistant secretary for OSHA, Loren Sweatt, issued a statement Thursday praising the court’s decision and reiterating that OSHA “reasonably determined that its existing statutory and regulatory tools” were sufficiently protecting American workers.
The president of the AFL-CIO, Richard Trumka, said in a statement Thursday that the court’s actions “fell woefully short of fulfilling its duty to ensure that the Occupational Safety and Health Act is enforced.”
More insurance and workers compensation news on the coronavirus crisis here.
By Angela Childers
The family of a ranch worker crushed to death by a bull is not precluded from seeking wrongful death and survival claims from the ranch, the Texas Supreme Court held Friday.
In Waak v. Rodriguez, the court affirmed in a 6-2 decision an appellate court’s ruling that ranch hands are not included in the Texas Farm Animal Activity Act and the deceased rancher’s family’s claims are not barred by the act.
Raul Zuniga worked as a ranch hand on the Carmine Charolais Ranch in Fayette County, Texas. He lived on-site and his duties included working cattle, performing landscaping and cutting hay.
In October 2013, while Mr. Zuniga was moving 20 head of cattle — an activity he had done many times — a bull trampled him to death. His parents and surviving children sued the ranch owners for wrongful death and survival claims. The ranch did not have workers compensation insurance.
A trial court held that the Farm Animal Activity Act barred the Zuniga family’s claims. However, a Texas appellate court reversed that decision, holding that the Act does not apply to ranchers or ranch hands. The Texas Supreme Court agreed, affirming the appellate court’s decision.
Texas farm Animal Activity Act limits liability for injury to an individual participating in a farm animal activity or livestock show that results from an “inherent risk” of those activities. The act identified a “participant” as “a person who engages in an equine activity, without regard to whether the person is an amateur or professional or whether the person pays for the activity or participates in the activity for free” and details “activity” in a non-exhaustive list that includes animal shows, fairs, hunting, rodeos, trail riding, livestock shows, handling and teaching.
The court held that considering a ranch hand as a “participant in a farm animal activity” is inconsistent with the act’s history and context, and does not shield the ranch owners from liability for any alleged negligence that resulted in Mr. Zuniga’s death.
The court also noted that if the act included ranch hands, it would essentially deny those injured workers of “any remedy whatsoever for their injuries” if the ranch opted out of workers compensation insurance.
Two justices dissented from the majority, holding that the act did not exclude people who handle, load or unload farm animals and that the majority should have stuck “strictly to the statutory text, even when the result is unexpected or seems unfair.”
Cincinnati Insurance Co. has prevailed over a Fairfax Financial Holding Ltd. unit in a coverage dispute involving a worker’s death.
By Louise Esola
The top 5% of costliest workers compensation claims account for 25% of total physical therapy costs, with the average cost associated with that top 5% more than five times the average cost, according to a white paper released Wednesday by One Call Care Management Inc.
The Jacksonville, Florida-based managed care organization that serves injured workers used its 2019 database in its study of what it called “at-risk” cases, finding that predictive analytics can help identify such injured workers early in the claims process.
“To date, the inherent problem has been the difficulty in accurately identifying these individuals early enough to develop and implement an intervention plan quickly and change the potential outcome of the injured worker’s treatment,” the paper states. “Historically, these cases were identified as problematic and at-risk only after a treatment plan exceeded the initial guidelines, and by then, it was too late to reverse course.”
By assessing such issues as a claimant’s type of work and medical history, “predictive analytics can identify specific triggers that pinpoint an at-risk case and flag it at the onset of treatment,” the paper states.
“This enables the therapist to create a more proactive approach to their treatment plan.”
By Louise Esola
Health care workers and those working in protective services accounted for 83.3% of COVID-19 indemnity workers compensation claims filed in Florida as of May 31, according to a report issued Tuesday by the Florida Department of Financial Services, Division of Workers’ Compensation.
The report tallied 3,807 time-off, virus-related claims filed since the start of the pandemic, totaling $3.2 million in benefits paid. It found that that 45.7% of claims came from health care workers and 37.6% from the protective services sector, which includes first responders.
Service industry workers represented 9.1% of claims, office workers 6.1%, and airline workers 1.5%.
Self-insured governments paid the largest amount at $1.8 million. Private insurers paid $856,484, according to the report.
COVID-19 claims accounted for 2.9% of total paid workers compensation benefits in Florida from the start of the pandemic through May 31.
The report said there were 1,718 claims denials — 1,695 total denials and 23 partial denials. Nineteen of the claim denials were in the health care space, according to the report.
March saw the most claims, with 1,949 filed. The figures tapered down to 300 claims in May.
By Angela Childers
The National Council of Insurance Legislators voted to adopt a workers compensation drug formulary model, the council announced Wednesday.
Indiana Rep. Matt Lehman, 2020 president of the Manasquan, New Jersey-based NCOIL, introduced the formulary at the council’s 2019 annual meeting in Austin, with the purpose of requiring “the establishment of a drug formulary for use in a state’s workers’ compensation system in order to facilitate the safe and appropriate use of prescription drugs in the treatment of work-related injury and occupational disease,” said the council in a statement.
The initial draft of the NCOIL formulary model was based on Indiana’s formulary, in which the state adopted the Official Disability Guidelines Workers Compensation Drug Formulary Appendix A for drug reimbursement, which took effect March 2018. Indiana’s formulary also specifically prohibited reimbursing for drugs listed as “N” on the formulary except when used in medical emergencies.
Unlike Indiana’s formulary, however, the NCOIL model will provide states the option of either selecting a nationally recognized, evidence-based formulary, or developing their own formulary, NCOIL said in a statement.
By Angela Childers
Pie Insurance Holdings Inc. has secured $127 million in new financing to continue to expand its small business workers compensation line, the three-year-old insurtech firm announced in a statement Thursday.
Pie has received a $100 million equity capital commitment for the creation of its affiliated company, Pie Carrier Holdings, and to purchase licensed insurers to enable it to issue a portion of its own policies, as well as $27 million in financing to support continued growth and expansion of the insurtech’s current workers compensation products.
Gallatin Point Capital LLC was the lead investor in this new financing commitment. Other investors included Greycroft LLC, SVB Capital (the venture arm of SVB Financial Group), Aspect Ventures LP, Elefund Management Co. LLC and Sirius International Insurance Group Ltd.
Pie, with headquarters in Washington and Denver, currently offers workers compensation to small businesses in 34 states and the District of Columbia.
By Angela Childers
A firefighter’s widow can pursue death benefits despite her husband’s earlier workers compensation settlement agreement releasing the insurer from all future claims made by his dependents.
In the case, In the Matter of Collins, the Maryland Court of Appeals in Annapolis unanimously held Tuesday that the firefighter’s dependents were not bound by the contract that he — not his dependents — signed.
Bernard Collins worked for the Huntingtown Volunteer Fire Department. In 2012, he filed a claim for disability benefits for heart disease and hypertension that was presumed to be compensable under Maryland law. The insurers, Chesapeake Employers Insurance Co. and Selective Insurance Co. of America, contested the claim, but eventually agreed to a settlement in 2015. The settlement agreement provided Mr. Collins with a lump sum payment of $150,000, a Medicare set-aside annuity and annual payments of about $4,000, with the stipulation that Mr. Collins and his dependents would release the insurers from any and all future claims that may arise under the Maryland Workers Compensation Act. The settlement was approved by the Maryland Workers Compensation Commission. His wife was not party to the settlement.
In 2017, Mr. Collins died from cardiac arrest and his widow, Peggy Collins, filed a dependent’s claim for death befits under the Act. The commission denied her claim based on the terms of the settlement agreement, and she appealed to the Calvert County Circuit Court, which upheld the denial.
The Maryland Court of Special Appeals, however, reversed the decision and remanded the case back to the commission, holding that Mrs. Collins was not a party to the settlement and therefore her husband’s settlement “does not extinguish the independent claim for death benefits that a surviving dependent may bring if the employee dies of the same compensable injury or disease.”
The insurers appealed, but the appellate court affirmed the Court of Special Appeals decision that Mr. Collins’ settlement did not bar his widow from asserting her independent claim for death benefits under the Act.
The insurers argued that Mr. Collins “unambiguously” agreed to release the insurers from future claims, but the appellate court found that the release was ambiguous and devoid of language specific to death benefits, and that the settlement agreement is unenforceable against any person who is not party to the agreement.
The court held that the Act permits dependents to release their current or future death benefit claims, but that employees do not have the power to release their dependents’ independent claims for them.
Although the insurers argued that a decision in Mrs. Collins’ favor would “largely end” the settlement for workers compensation cases by removing “any finality,” the court said insures may choose to provide payments to dependents in exchange for their death benefits release in future settlements.