To our clients, partners, and friends regarding the urgent issue of the impact of COVID-19 on workers’ compensation issues involving (1) modified duty, and (2) alleged COVID-19 claims:
We recommend the following:
(1) Do NOT reinstate workers’ compensation wage loss benefits for workers on modified duty who were placed out of work as a result of layoffs, furloughs or business closures due to the present COVID-19 situation. This is because:
- This is an incredibly unique and novel situation which does not call for workers’ compensation benefits, and it is not what the workers’ compensation laws were designed to address. There is case law to support this position.
- There are multiple sources of alternative benefits that are readily available to these employees at the state and federal levels, including enhanced unemployment compensation benefits, FMLA, etc.
- In many cases, the employee may actually be better off utilizing these other alternative sources of benefits than if they were to receive workers’ compensation benefits (i.e., more money, no attorney’s fees deducted, etc.).
- Voluntary reinstatement of benefits unnecessarily and unduly burdens carriers and self-insured employers and may obligate them to pay benefits indefinitely into the future, which unnecessarily and significantly increases exposure, settlement values, etc.
- Loss of significant offsets or credits will likely occur for alternative benefits that the employee might have otherwise received (i.e., unemployment compensation benefits) if workers’ compensation wage loss benefits are voluntarily reinstated or initiated.
- If benefits are not reinstated and litigation were to commence, then an employer or carrier is much more likely to be dealing with what would be a limited claim for wage loss benefits when the governmental restrictions are lifted and people return to work than if benefits are voluntarily reinstated which will result in an ongoing open-ended obligation to pay wage loss benefits.
We are available to answer questions on a case by case basis. Please reach out to your Chartwell Law attorney with whom you are already familiar. Otherwise, please reach out via email to address your COVID-19 workers’ compensation questions regarding how to proceed: firstname.lastname@example.org.
(2) At this time, do NOT accept workers’ compensation claims for asserted injuries due to alleged work-related COVID-19 exposure. This is because:
- The potential workers’ compensation compensability of COVID-19 cases is still in a great state of uncertainty, including who may be covered, causation and burden of proof issues, what numerous state legislaturesare considering, possible presumptions in those statutes, as well as the potential unconstitutionality of such legislation, etc. The issues, and related answers, will continue to develop and provide more clarity but for now, automatic acceptance of COVID-19 cases without clarification of these issues, as well as thorough investigation and establishment of medical causation, as well as discernment of legal/constitutionality issues, etc., could place a staggering financial burden on workers’ compensation carriers and self-insured employers. As claims are asserted, we are available to address each one on a case by case basis.
- The major costs associated with the serious COVID-19 cases where people fortunately recover will be the hospitalization, ICU treatment, and related medical bills. In many of these cases, those costs will be paid by health insurance carriers. If a denial is made for a COVID-19 claim that results in hospitalization, then the possibility exists that liability for those massive 6-7 figure hospital bills might be avoided or, if not completely avoided, then perhaps paid at a fraction of what they otherwise would have been.
- Premature acceptance of a claim precludes subsequent denial in many jurisdictions. However, a preliminary denial could, under the proper circumstances, be rescinded and the claim acknowledged at a subsequent point in time upon completed investigation, the establishment of medical causation, confirmation of insurance coverage for the period in question, and factual and legal basis for the compensability.
We are again available to answer questions on a case by case basis. As noted above, please reach out to your Chartwell Law attorney with whom you are already familiar. Otherwise, please reach out via email regarding how to proceed: email@example.com.