The COVID-19 pandemic has created countless challenges for state policymakers across the country. Among those is the role that workers’ compensation insurance plays in helping workers infected with the disease. Every state has its own unique workers’ compensation policy landscape. States apply varying coverage requirements and standards based on industry, occupation, and the size and structure of a business. Workers’ compensation is designed to benefit both employees and employers by providing reliable insurance coverage with predictable, timely payments and reduced legal costs. Beyond providing medical treatment at no cost to the employee, workers’ compensation also provides wage replacement benefits for lost wages resulting from time away from work. If a worker dies due to a qualifying condition, the worker’s family could be eligible for financial death benefits. Most states have a dedicated workers’ compensation court system where judges make the final decision on claims and benefits awarded.
Does Workers’ Compensation Cover COVID-19?
The answer is complicated. Generally, workers’ compensation does not cover routine community-spread illnesses like a cold or the flu because they usually cannot be directly tied to the workplace. Some states have made exceptions for certain workers who develop chronic illnesses, like cancer, resulting from repeated exposure to harmful materials and environments. According to the National Council on Compensation Insurance, prior to the COVID-19, at least 19 states had policies stating that when firefighters and other first responders develop lung and respiratory illnesses, those conditions are presumed to be work-related and covered under workers’ compensation. It is unclear if those existing policies would include COVID-19 illnesses.
The COVID-19 pandemic presents a unique circumstance where the many jobs that are not typically considered hazardous have suddenly become very dangerous for the workers. Workers deemed essential including health care workers, mass transit operators and grocery store workers are at a high risk of exposure to the virus while at work. But the more hazardous working conditions do not guarantee that a COVID-19 infection would be covered under workers’ compensation in most states.
State Response to COVID-19
States are taking action to extend workers’ compensation coverage to include first responders and health care workers impacted by COVID-19. A common approach is to amend state policy so that COVID-19 infections in certain workers are presumed to be work-related and covered under workers’ compensation. This presumption places the burden on the employer and insurer to prove that the infection was not work-related making it easier for those workers to file successful claims. Some employers and insurers have raised concerns that these presumption policies will increase insurance costs for employers at a time when businesses are already facing significant financial challenges.
In total, 17 states and Puerto Rico have take action to extend workers compensation coverage to include COVID-19 as a work-related illness. Nine states have enacted legislation creating a presumption of coverage for various types of workers. Minnesota, Utah and Wisconsin limit the coverage to first responders and health care workers. Illinois, New Jersey and Vermont cover all essential workers while California and Wyoming cover all workers. Four states have used executive branch authority to implement presumption policies for first responders and health care workers in response to COVID-19. Another four states including California and Kentucky have taken executive action to provide coverage to other essential workers like grocery store employees.
In March, Washington state’s Department of Labor and Industries announced that health care workers and first responders will receive wage-replacement benefits and have all related health care expenses covered under the state’s workers’ compensation program when quarantined by a physician. Washington has a single publicly-managed insurance option that employers can purchase giving the state more control over the coverage offered to workers. Other essential workers in Washington who test positive for COVID-19 will be considered on a case-by-case basis. The state has established three criteria for evaluating these COVID-19 claims:
- Was there an increased risk or greater likelihood of contracting the condition due to the worker's occupation (such as a first responder or health care worker)?
- If not for their job, would the worker have been exposed to the virus or contracted the condition?
- Can the worker identify a specific source or event during the performance of his or her employment that resulted in exposure to the new coronavirus (examples include a first responder or health care worker who has actually treated a patient with the virus)?
NCSL is tracking legislation, executive orders and other administrative policy changes that directly address workers' compensation coverage of COVID-19.