Historically, communicable diseases, such as the flu, have generally not been covered by workers’ compensation insurance. Workers can file a workers’ compensation claim alleging COVID-19 contraction or exposure, but until the recent Executive Order N-62-20 signed by Governor Gavin Newsom, they would have to show that they contracted the disease while they were on the job. Workers’ compensation benefits apply to an injury or illness that meets the criteria of: “Arise out of or in the Course of Employment." Workers who are injured on the job receive indemnity benefits and medical treatment with no copayments or deductibles.
Labor and Business Leaders in California were aggressively lobbying Governor Newsom’s office over the sweeping change the administration was considering to the state workers’ compensation system. "Many businesses and their owners are casualties of the necessary economic shutdown," wrote California Chamber of Commerce President Allan Zaremberg to Newsom and his staff in a letter dated April 7. "They cannot be expected to shoulder a new employer-financed social safety net, with expensive new mandates, at precisely the moment when small businesses are shuttering, employee hours are cut, and uncertainty about the future is the new normal”.
On May 6, 2020 Governor Gavin Newsom did indeed sign Executive Order N-62-20, which can be read here. Although the executive order expired on 7/5/2020, the State of California is working on either extending this order or making it permanent. In summary, the order identifies requirements to establish whether an employee who contracts COVID–19 is eligible for workers’ compensation benefits.
Any COVID–19-related illness of an employee shall be presumed to arise out of and in the course of the employment for purposes of awarding workers’ compensation benefits if all the following requirements are satisfied:
- The employee tested positive or was diagnosed with COVID-19 within 14 days after a day they performed services at the employee’s place of employment at the employer’s direction
- The day the employee worked at their place of employment at the employer’s request was after March 19, 2020
- The employee’s place of employment described above was not in the employees’ home or residence
- The diagnosis of COVID–19 was done by a physician who holds a physician and surgeon license issued by the California Medical Board and that diagnosis is confirmed by further testing within 30 days of the date of diagnosis.
This presumption is disputable and may be controverted by the employer, but unless it is controverted, the Workers’ Compensation Appeals Board is bound to accept the workers’ compensation claim. This presumption shall only apply to dates of injury or illness occurring through 60 days following the date of this Order or July 6, 2020. A claim of COVID–19 related illness must be rejected by the employer and insurance carrier within 30 days after the date the claim form is filed. Employees with COVID–19 can collect temporary disability after they have exhausted all of their paid sick leave.
The California Workers’ Compensation Insurance Rating Board (WCIRB) estimates such a shift could cost employers between $2.2 billion and $33.6 billion per year with an approximate mid-range estimate of $11.2 billion, or 61 percent of the annual estimate cost of the total workers’ compensation system prior to the impact of COVID–19.
The healthcare industry may also be impacted by changes in the presumption this Order will provide by greatly impacting their premium cost for workers’ compensation.
Here at CAP Agency, we strive to get you the best coverage at the lowest premiums. This is why we work with insurance carriers that care about their insureds. We are in constant contact with the carriers we use to be informed of what they are doing to help their customers. If you are struggling during this time of disruption, please call us. We will reach out to our carriers to get you the help you need on all of your insurance you have with our Agency. You can call or email us at 800-819-0061 or CAPAgency@caphysicians.com.