Midwest Mayhem: COVID-19 and the Workers Compensation Rebuttable Presumption

The national response to the coronavirus pandemic evolves as the scope of the COVID-19 broadens into nearly every aspect of our society. This ever-changing landscape is now impacting how states are responding to COVID-19, especially as it relates to worker's compensation. The recent developments in Wisconsin, Illinois, and Kentucky represent an interesting trend in this legal landscape and are creating a bit of “mayhem” for employers in those states.

Wisconsin worker's compensation law traditionally places the burden on the employee to show that their injury or occupational illness is “compensable’ and thus arose out of and in the course of employment. The Wisconsin Worker’s Compensation Act places a “rebuttable presumption” on the employee to meet this standard before being afforded the lost time, medical and rehabilitative benefits provided by worker’s compensation insurance. Current law defines “injury” as mental or physical harm to an employee caused by accident or disease.

The widespread nature of the COVID-19 virus and the community manner in which it is contracted makes the causal connection between COVID-19 and employment obscure and difficult to establish. Therefore, an employee’s claim that their viral illness arose out of and in the course of employment will be subject to scrutiny and, depending on the nature of the employee’s work duties, likely denied under the Act. 

On Tuesday of this week, the Wisconsin State Assembly passed a COVID-19 relief bill, Assembly Bill 1038, which has a great impact on worker's compensation and, if signed into law, would shift the “rebuttable presumption” to the employer. The bill provides that an injury to a “first responder” is presumed to be caused by the individual’s employment. This new presumption will require that the individual be diagnosed with, or have a positive COVID-19 test, and the employee must have been exposed to persons with confirmed cases of COVID-19. It further provides that the presumption of work-relatedness may be rebutted by specific evidence that the injury occurred outside of employment.

The bill defines “first responder” as an employee of or volunteer for an employer that provides fire fighting, law enforcement, medical, or other emergency services who has regular contact or is regularly near members of the public requiring emergency services within the scope of the individual’s employment. The proposed law would be initiated upon the governor’s declaration and signature, and remain in effect for 30 days after the governor terminates the order.

Yesterday, the Illinois Worker’s Compensation Commission approved a new emergency rule that would create a similar “rebuttable presumption” for any employee of an “essential business” diagnosed with COVID-19. This new law, arguably broader in scope than Wisconsin’s proposed law change, will mean that employees will likely be able to obtain worker's compensation benefits if they are diagnosed with the COVID-19 virus and working in an “essential business”. The Illinois law will remain in place for 150 days after the rule is filed with the Illinois Secretary of State’s Office.

In Kentucky, a state order signed into law by its governor last week will expand front line employee entitlement to lost time benefits in cases in which they were quarantined and from work due to possible COVID-19 exposure, even if the employer/insurer denies compensability of the claim.

While these expansions of worker's compensation benefits may increase claim frequency for employers in Wisconsin, Illinois, and Kentucky it is yet to be determined whether much severity will be added to the loss experience for these employers. Arguably most COVID-19 diagnoses do not require extensive disability periods, medical treatment, or permanent impairment. Yet we know certain more severe cases will result in larger incurred reserves and more lengthy disability periods.

OSHA recently added a bit of “mayhem” last Friday when it declared that COVID-19 is presumptively not work-related for OSHA recording rules, except for health care-emergency-responder, and corrections workers. In prior declarations, OSHA mandated the COVID-19 is a recordable illness if it is “work-related”. The new revision narrows the scope of reporting requirements for most employers, removing reporting requirements for circumstances in which the viral infections are due to likely community transmission.

Please refer to the references outlined below for more details on these important Wisconsin, Illinois, Kentucky, and federal OSHA law changes. As always, please contact your Ansay agent for any questions or concerns regarding how these law changes will impact your business.

References

Independent Insurance Agents of Wisconsin (IIAW), https://www.iiaw.com/

https://docs.legis.wisconsin.gov/2019/related/proposals/ab1038.pdf

Illinois Manufacturers’ Association, https://ima-net.org/category/news

https://newschannel20.com/news/local/workers-compensation-changes-for-covid-19

https://www.osha.gov/memos/2020-04-10/enforcement-guidance-recording-cases-coronavirus-disease-2019-covid-19

https://www.businessinsurance.com/article/20200415/NEWS06/912334041/COVID-19-comp-expansions-could-have-significant-impact-on-industry-coronavirus?utm_campaign=BI20200415WorkersComp&utm_medium=email&utm_source=ActiveCampaign&utm_campaign=BI20200415Worke