Wednesday, April 22, 2020

Employers' Groups in Illinois Fight to Screw Over Sick Workers

I know, I know, a provocative headline. 

But that's how I see the new lawsuit brought by the Illinois Manufacturers Association and the Illinois Retail Merchant Association. The lawsuit seeks to block the recently enacted emergency amendment to the Illinois Workers Compensation rules, an amendment that provides a rebuttable presumption, for workers at businesses not shut down during this pandemic, that any COVID-19 infection is causally connected to their employment.

In short, the amendment extends Workers Comp coverage for COVID-19 to a lot of people who are working at places exempted from the emergency shutdown.

The amendment covers places like gas stations, hotels, restaurants (those still allowed open to serve take-out) professional services (like my own company here) funeral homes, grocery stores, and more, which were allowed to remain open and where lots of people are risking their lives by showing up to work every day.

These two powerful business groups claim that the emergency amendment was created improperly, bypassing the usual legislative process. About that I can have no professional opinion.

But the lawyer who filed the suit also claims that this emergency amendment will force employers to pay for "additional medical and salary costs regardless of whether an employees' illness was contracted outside of the workplace."

About that, I have some thoughts.

First off, most of the members of these two groups buy insurance for their Workers Comp coverage. That means that the immediate "medical and salary costs" from the amendment will be born by insurance companies, not the employers currently struggling with these unprecedented times.

Of course, to the extent that these COVID-19 claims are significant and substantial in the aggregate, Workers Comp insurance rates will likely increase--in future years.

But those increased insurance costs won't be immediate-- except for the largest employers who likely are on loss sensitive Workers Comp plans like Large Deductibles. For those bigger employers, any increases in claims costs will likely translate into additional insurance costs much sooner than for smaller companies on what are known as "Guaranteed Cost" Workers Comp policies.

But even those insurance increases may not come to pass, because it seems quite possible the federal government will have to come up with an emergency reinsurance program for insurers regarding COVID-19. It's already been proposed in Congress, and if it comes to pass, premium increases for Workers Comp would be significantly diminished.

One of the lawyers bringing the suit also has inadvertently highlighted the very reason this emergency amendment was so very much needed. Scott Cruz, one of the attorneys for the two business groups, was quoted in Crain's Chicago Business thusly: "At a time when many are waiting for relief from the federal and state government in an effort to make payroll and retain workers, they will now be forced to pay for additional medical and salary costs regardless of whether an employees' illness was contracted outside of the workplace."
Yeah, about that. See, without this emergency amendment, a worker who gets sick with COVID-19 would have to somehow prove it came from work, and not from somewhere else. As is readily evident, that is a practical impossibility. The emergency amendment establishes that, for these workers who are working at businesses that are specifically exempt from the general shut-down order, workers won't have to prove the impossible in order to get Workers Compensation benefits.
How outrageous!
Of course it's impossible to prove where one contracted this goddamned virus. So for people who are working in workplaces where common sense and logic tell you they are going to be exposed to this virus, there needs to be a presumption it came from work.

Without this presumption, workers who do catch the virus at work likely would not be able to get Workers Comp benefits, precisely because it's impossible to prove it was contracted at work. That's why the emergency amendment was needed for workers in those businesses who were exempt from the shut down orders.

But let me get this straight. The workers at these companies are risking their lives, risking the lives of their families, to show up to work where an incredibly infectious virus likely exists. And these business groups want to whine that protecting these people with Workers Compensation coverage is unfair and expensive?

My immediate reaction is not with words, but involves a certain notorious middle digit.

I don't know what overpaid geniuses at these organizations thought this was a good idea, to file this suit, but I have a news flash for them:

It was a fucking horrible idea. And it essentially spits in the face of that whole "We're all in this together" business that a lot of good folks have been using as a rallying cry in these dark times.

The day after this emergency amendment was announced, I filed a claim with my Workers Compensation insurer, because we have a worker at our little shop who was diagnosed with COVID-19 and we are a professional services company, which means we are covered by this emergency amendment.

And the reason I made this filing was that I want my worker to get the Workers Compensation benefits that could be so important. So I made the filing without my worker even realizing that she might be eligible for coverage, and then I informed her to expect a call from the insurance company.

I might well have been the first employer to file a claim under the emergency amendment, and I was happy to do it.
Because it's the right goddamned thing to do.
Maybe the big shots at these big employer groups got their noses out of joint because this emergency amendment came about without their involvement. These groups tend to view Workers Compensation as a big political football game, and they love being players in that big game, so maybe their bruised egos account for part of the motivation for this lawsuit.
Maybe they think their members are really cheapskate skinflints who don't give a damn about what happens to those people currently risking their lives to keep their businesses running. I don't think that's really the case--that is, I don't think most of their members are that way, but perhaps these big shots think that's the case.
Look, making COVID-19 infections for these workers covered under Workers Comp gives important protections to the employers involved, not just to the workers. Workers Comp is what's known as an Exclusive Remedy--so it generally shields employers from lawsuits. That's a fundamental part of the "Great Compromise" aspect of Workers Compensation--it provides no fault coverage but gives employers important legal protections.
So if these brilliant business groups should prevail, it might well create unanticipated negative consequences for their members. Without the protection of the Exclusive Remedy that is Workers Compensation, these employers might well end up on the receiving end of a number of individual lawsuits on behalf of sick workers or their survivors.
Be careful what you wish for, Illinois Manufacturers' Association and Illinois Retail Merchant's Association. You might get it. And the butcher's bill for dead workers not covered by Workers Compensation might be worse than the costs of covering those workers.
That's the kind of cold-blooded argument that be most important for those who view workers only as expendable inputs to their business. I don't really think most employers in Illinois see things that way. I think most employers, certainly most employers I've known over the years, value and respect those whose labors make their companies possible. Those employers want to do right by their people, I believe.
But these two business groups appear to have not gotten that memo. Perhaps they think they will score points with their members by this provocative action. I hope they don't. I suspect they won't. At the very least, the optics are horrible. The phrase "stinks on ice" comes to mind. If members of these two groups feel the same, perhaps now is the time to communicate that to the organizations.
Right now, these two business groups think they are speaking for their members. I suspect that may not really be the case.

In any event, the lawsuit has been filed. We shall see if it proves successful. I pray it is not, but money talks and working people walk. Especially folks who work at hotels and gas stations and grocery stores.

I think it's fair to say you can color me disgusted.

Thursday, April 16, 2020

California Orders Insurance Premium Refunds Over COVID-19

Insurance companies have been ordered to return premiums to customers and businesses affected by the novel coronavirus pandemic by order of California Insurance Commissioner Ricardo Lara, his office announced early Monday, April 15.

The commissioner's office said the shelter-in-place order across the state has reduced the overall risk of loss and thus these premium refunds were warranted.

"With Californians driving fewer miles and many businesses closed due to the COVID-19 emergency, consumers need relief from premiums that no longer reflect their present-day risk of accident or loss," Lara said in a statement. "Today's mandatory action will put money back in people's pockets when they need it most."

The premiums covered are for March, April and May of 2020, if the shelter-in-place order continues through then.

The particular categories of insurance premiums covered by the order are: private passenger automobile, commercial automobile, workers' compensation, commercial multi-peril, commercial liability, medical malpractice and "any other insurance line where the risk of loss has fallen substantially as a result of the COVID-19 pandemic."

Insurance companies have until August to comply with the order -- whether through premium credits, reductions, return of premiums or other appropriate premium adjustments.

A Lot of Illinois Workers Just Got Workers Comp for Covid-19

Illinois Governor J.B. Pritzker has announced an emergency amendment to the Illinois Workers Compensation Act that retroactively makes the COVID-19 virus an occupational disease for a great number of workers in Illinois, with a 'rebuttable presumption" that the infection was "casually connected" to their work.

The Amendment makes this change retroactive back to March 20, 2020 and covers workers in a considerable number of industries. These industries are described as "Front Line Workers" which may confusingly suggest that these workers are medical folk or first responders, but those workers are separately included in the amendment. Front Line Workers are defined in this amendment as workers in:

grocery and pharmacy; food, beverage and cannabis production; charitable and social service organizations; gas stations and businesses needed for transportation; financial institutions; hardware and supply stores; critical trades; mail, post, shipping, logistics, delivery and pick-up services; educational institutions; laundry services; restaurants for consumption off-premises; essential business and work-from-home suppliers; home-based care and services; residential facilities and shelters; professional services; day-care centers for children of essential workers; manufacture, distribution and supply chain for critical products and industries; critical labor union functions; hotels and motels; and funeral services.

This makes COVID-19 a covered occupational disease for workers in all these fields, retroactive back to March 20.And the "rebuttable presumption" that it is connected to work means that the worker would not have to prove the infection came through work, but rather it would fall to the insurer or employer to prove that it was not, which in most cases would not be easily done.

Workers Compensation provides no-deductible, no co-pay medical insurance, coverage for lost time, and death benefits, if God forbid they were called for. Workers Compensation also provides coverage in the case of long-term disability or permanent disability.

In other words, this is a very big deal for a lot of workers in Illinois who might have lacked regular health insurance or paid sick leave.

This writer, in fact, has already turned in what might well be the first Workers Compensation claim under this new amendment, for one of our workers who was diagnosed with COVID-19 ten days ago. Until this amendment went into effective April 15 (but retroactive to March 20) COVID-19 would be difficult to establish as having been connected to work, but with this new amendment it is automatically presumed to be so.

Monday, April 13, 2020

NCCI Changes It's Rules Re: Payroll and Classifications During the Pandemic

The National Council on Compensation Insurance (NCCI) has announced it is changing its rules regarding Workers Compensation insurance premiums. NCCI is the Workers Compensation insurance rating bureau used in most (but not all) states in the U.S. and the manuals of rules NCCI produces are used by all Workers Compensation insurance companies writing insurance within those states.

Just a couple of weeks ago, NCCI issued a notice that payroll paid to workers who were not actually working (due to the pandemic) would still be included in the payroll used to compute Workers Comp premiums.

That has now changed. NCCI has indicated it will be filing revised manual rules so that remuneration paid during the pandemic to workers who are not actually working will be excluded from insurance premiums.

The separate California rating bureau, WCIRB, had made a similar announcement a week or so ago.

NCCI has also announced the revised rules will allow for classification changes for workers who have changed the nature of their work duties (like working from home) as long as employers document when the change occurred.

So a small bit of good news amidst all the angst and anxiety of our current crisis.

Friday, April 10, 2020

Illinois Department of Insurance Order re: Cancellations

The Illinois Department of Insurance has directed insurers that write Property and Casualty Insurance in Illinois, a Bulletin dated April 3, 2020, that there is a moratorium on cancellations and nonrenewals as of March 9, 2020. Insurers should postpone or withdraw any previous notice of cancellation or nonrenewal in which the cancellation or nonrenewal occurs on or after March 9, 2020.

This applies to Automobile and Home insurance policies and Commercial P&C Insurance other than Fidelity/Surety and Ocean Marine policies issued in Illinois.