Don’t assume workers' comp will cover COVID-19 illness

Warehouse worker in hardhat coughing into a tissue

By H. Allan Hunt

April 15, 2020

Workers’ compensation is a state-controlled program that pays benefits to workers who are injured or become ill from work-related causes. Although rules are set by individual states, benefits almost always include wage replacement, medical treatment, and any rehabilitation costs. These programs are widely available: the National Academy of Social Insurance estimates that 87 percent of all jobs were covered in 2017, with exceptions for a few industries (such as agriculture) and very small employers.

In general, protections are stronger for workplace injuries than for illnesses, as it is easier to verify that an injury occurred while working. Indeed, and highly relevant for COVID-19, there is a long history of limited coverage of “occupational diseases” in workers’ compensation. Many of the widely accepted covered illnesses are based on specific job-related hazards that were determined more than a generation ago—think black lung disease in miners. These diseases are distinguished from “ordinary diseases of life” that generally cannot be attributed to the workplace and are therefore usually not compensable.

While it is clear that certain groups of workers—primary caregivers, emergency medical providers, and other essential workers—are being exposed to the COVID-19 virus through their employment, it is not yet clear that workers’ compensation rules, and the lawyers arbitrating them, will consider illness from the virus an occupational disease deserving of routine compensation. Although the Occupational Safety and Health Administration (OSHA) issued a guidance in early March 2020 that COVID-19 should be regarded as “a recordable injury” that employers must report on OSHA logs, OSHA’s ruling is not relevant to compensation under state workers’ compensation programs.

Rather, allowable coverage will depend on state legislative or executive action, or in their absence, legal precedent. For the latter case, in the first instance of such a claim, it will be up to the employers and/or their insurers to decide whether they “accept” the claim as compensable, or perhaps assert that it is an ordinary disease of life to which we are all at risk. If decided to be the latter—likely in court—COVID-19 illness will not be the employer’s responsibility and no workers’ compensation benefits will be paid to those who become ill. The context of employment will likely matter. In the case of a medical practitioner in a hospital, the risk of work-related infection seems relatively clear. In the case of a bus driver, however, it is much less so. Even with the rigorous contact tracing that has been proposed, it will be difficult to demonstrate that a worker who falls ill with COVID-19 was exposed at work and not through other circumstances.

Only a few states have acted to clarify the issues thus far. California appears to have been the first to declare its policy intentions. On March 12, Governor Gavin Newsom issued an executive order stating that any worker exposed to the novel coronavirus on the job is eligible for workers’ compensation benefits. Apparently to avoid strong opposition from employers and insurers, he also specified that this compensation would come from statewide employer sources rather than from individual employers (or their insurers).

In addition, the California State Compensation Insurance Fund set aside $50 million to compensate state workers who have to self-isolate due to COVID-19; this is meant to cover some medical costs and up to six weeks of lost wages. Importantly, these workers will not have to prove they contracted the illness on the job. Additionally, business owners can apply for grants of up to $10,000 for expenses related to protecting their employees from COVID-19.

Florida and Kentucky have followed similar administrative paths, directing that first responders should be eligible for workers’ compensation benefits because of the presumption that their exposure to COVID-19 occurred as a result of their employment.

Minnesota seems to have been the first state legislature to enact provisions related to COVID-19. It enacted legislation to ensure coverage for first responders and health care workers, plus child care workers serving families of front-line employees. Governor Tim Walz signed this into law on April 7.

However, it remains to be seen if or how COVID-19 will ultimately be resolved in state workers’ compensation programs. Some states may move aggressively to ensure that workers are covered, likely with presumptions for specific workers. Others will hang back and wait for the law and administrative procedures to work it out, a process that will take months. It seems unlikely that our century-old state workers’ compensation programs will provide a universal solution that is acceptable to today’s body politic.