In the latter part of 2019, we all became aware of a strain of coronavirus known as COVID-19 originating in China.  And, we have all watched – some with fascination, some with fear and some with ambivalence – the progress of this virus across the world. Now qualifying as a pandemic, it is affecting all our lives in some form or fashion.

We have an unprecedented situation that will create a unique set of events and circumstances never experienced before in the property/casualty insurance and claims industry. We need to understand potential ramifications in order to effectively plan for the future and emerge on the other side.

COVID-19 is hitting our medical system and treatment processes. We have seen a rush for testing that must be processed elsewhere for results determinations, which has created overcrowding in doctors’ offices, hospitals, and emergency rooms. It has also created concerns regarding the availability of equipment for the treatment of those with the most critical need. The strain being placed on our medical system will hopefully be short-lived, however, its impact will be felt not only today but, in the days, weeks, and months to come.  

Industry officials, as well as federal and state regulators, are focused on COVID-19 in the employment setting. Federal legislation has been enacted for disability and unemployment, and states are considering what, when, and how COVID-19 might be a compensable claim under workers compensation. 

Two states, Washington and Michigan, have issued directives on workers compensation coverage for the quarantine of healthcare workers and first responders and more may follow. Numerous claims are being made alleging exposure to COVID-19 in the workplace, yet for such a determination testing must first be conducted to see whether workers have COVID-19. At this point, test results take time with consideration for self-quarantine during the process. The challenge becomes proving where the individual was exposed and contracted the virus.

The pandemic also affects the workers compensation environment outside of claims involving COVID-19.  First, there are delays in access to medical treatment for existing workers compensation claims. Earlier this year, the Centers for Disease Control issued guidance for healthcare facilities that encouraged rescheduling nonurgent outpatient visits and elective surgeries to prepare and accommodate the needs for testing and treatment of COVID-19. The guidance prioritizes medical treatment affecting many existing workers compensation claims. Second, in those medical facilities available for treatment, injured workers may be wary of potential exposure to others with COVID-19. Finally, doctors are closing clinics or cutting hours, limiting the availability of medical treatment. 

As a result, access to medical care may be affected. Workers compensation injuries typically follow a protocol as to medical treatment, requiring ongoing treatment as a focus on recovery and return to some form of gainful employment. Delays in medical treatment lengthen the recovery process, simultaneously impacting return to work, either temporarily or permanently.   

Additionally, COVID-19 is hitting the business environment. Many employers are being forced to close their places of business under “shelter at home” directives or to ensure social distancing. Further, due to the economic slowdown, some employers are laying off employees or moving to shut down their operations. This affects the availability of return to work options for employees with workers compensation claims during the recovery process or when they have been released completely from their work injury.

Additionally, state governments are wrestling with the need to ensure their employees practice social distancing and the need to provide essential services for those that utilize their services. As a result, some workers compensation courts have suspended hearings and in-person meetings, while others are allowing virtual or telephone hearing options.   

What we will see is a lengthening in the duration of workers compensation claims as a result of delays in medical treatment caused by reduced availability or trepidation. We also expect extensions of disability periods due to delays in medical treatment and availability of return to work options. These delays will affect the loss trends of business, which no one predicted due to the unprecedented nature of this event. The focus of the industry must be on how we work through this so that it is temporary in nature.

One positive occurrence has been the increased discussion around telemedicine, which has seen challenges to being embraced within the workers compensation environment.  

With the advent of COVID-19, some state agencies are moving forward and even encouraging this alternative route to medical treatment. For example, Texas relaxed its rules regarding telemedicine, stating that patients will not have to visit a doctor’s office before qualifying for telemedicine services.

Similarly, Ohio relaxed its rules that previously restricted the use of the home for video-based screening and has waived that restriction.

Advocacy as a component of claims administration is of greater importance today than it ever has been.  Aside from the natural anxiety associated with any injury, we now operate within a pandemic environment. Claims examiners must remain focused on engagement, proactive communication, exploring alternatives, objective intervention and supporting the injured worker’s recovery needs.

Additionally, the industry should be exploring avenues to work with injured workers to instill confidence in the workers compensation process and options towards claim resolution.  This could involve enhanced evaluations of existing claims that focus on what is needed to immediately drive positive outcomes and resolution to lessen one area of concern for the injured worker in the current anxiety-prone environment.

The property/casualty insurance industry is in an environment today that has never been experienced before. As an industry, we must focus on resiliency and continue to identify ways that will enable us to rebound quickly and adapt effectively to the present circumstances. Ultimately, this means delivering on the needs of injured workers and promoting the most positive outcome possible with regard to their work-related injury.

Max Koonce is chief claims officer, casualty, for Sedgwick Claims Management Services Inc. He can be reached at max.koonce@sedgwick.com