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As many COVID-19 workers compensation presumption laws put in place last year are set to expire, a growing number of states are considering permanent infectious disease presumptions that experts say could change the way the industry views and pays for occupational injuries.
As of late June, lawmakers in 16 states had introduced legislation that would allow employees who suffer from a communicable disease to file workers compensation claims presuming they contracted their illness at work, according to a roundup of bills by the Boca Raton, Florida-based National Council on Compensation Insurance.
“We are seeing preparations for the next pandemic,” said John Hanson, Atlanta-based vice president at Alliant Insurance Services Inc. “You can see the legislative trend is for contagious diseases.”
The language in the state proposals varies. Most of the presumptions would be rebuttable, meaning that if an employer can prove the worker contracted the illness elsewhere, the claim can be denied; some would only apply to certain workers who are at higher risk of contracting an infectious disease, such as health care workers and first responders. Most of the measures would only go into effect if there is a state of emergency or a pandemic.
Yet the trend toward accepting claims for diseases that can be contracted almost anywhere — such as COVID-19 — is problematic, experts say.
“By its very nature (a communicable disease) can take place outside of the workplace, and to just presume it occurred in the workplace is very dangerous for the workers compensation system,” said Steve Bennett, Washington-based assistant vice president for workers compensation programs and counsel for the American Property Casualty Insurance Association. “We would view any presumption, especially of a contagious disease, as an extremely dangerous precedent.”
Perhaps spurring the trend toward comp solutions in a pandemic is the emerging data that COVID-19 claims were not as severe as predicted: 61% of the reported COVID-19 claims have cost employers and insurers less than $1,500, and 94% have cost less than $10,000, according to NCCI data.
Yet there’s concern that another communicable disease could prove catastrophic for a comp system that could be responsible for covering diseases a person could contract anywhere, experts say.
“I think that is a real indication of why presumption bills are dangerous,” Mr. Bennett said.
Mark Walls, Chicago-based vice president of communication and strategic analysis for Safety National Casualty Corp., said such widespread disease presumptions are a “fundamental change in the workers compensation burden of proof” in that a worker would not have to show that he or she was injured at work. “This is an unprecedented expansion of workers compensation into an area that is not appropriate,” he said.
While the wave of disease presumption proposals is turning heads, the concept of occupational disease is not new. Black lung, for example, is typically seen as an illness connected to working in mines. Other examples cited by experts include Legionnaire’s disease, a bacterial infection caused by exposure to the legionella bacteria, which can only be contracted under certain conditions.
“To me those rebuttable presumptions make sense,” said Carin Burford, Birmingham, Alabama-based shareholder with Ogletree, Deakins, Nash, Smoak & Stewart P.C. and an adjunct professor who teaches workers compensation law at the University of Alabama School of Law. “But when you are talking about broad types of diseases” where there’s community spread, “what you are doing is taking the occupational out of the equation; you are just recognizing the disease.”
Jeff Adelson, partner with Newport Beach, California, firm Adelson McLean P.C., which represents employers, said any expansion of infectious disease presumptions has the potential to create more litigation.
“If you bring all these presumptions in with so many different occupations, where does it stop?” he said.
And the potential financial impact is impossible to quantify for an unknown risk, experts say.
“We are the number crunchers and if there was a way to estimate the impact of (an infectious disease presumption) then we would, but it is difficult to come up with a number on how to price this,” said Jeff Eddinger, senior division executive of data quality and compliance for NCCI, which is still gathering data on COVID-19 claims, some of which are now considered long-tail.
Mr. Adelson said the swiftness of the industry’s reaction to COVID-19 might complicate the issue for insurers. “Now how do you underwrite for something that doesn’t quite exist?”
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