The COVID-19 pandemic has completely changed the rules for business owners. With so many people out of work or working from home, businesses are facing an entirely new set of uncertainties.
One of the biggest is how this pandemic will impact the workers’ compensation system, and employers are naturally anxious about how it will affect their workers’ comp programs and premiums.
As with most other aspects of the pandemic, the impact on workers’ comp is still a moving target.
The pandemic has thrown a huge element of uncertainty into the workers’ comp system, and there are more questions than answers right now.
Added to the uncertainties are the potential catastrophic costs. Employers have never before been held responsible for such things as an employee catching a cold or the flu from a coworker or customer because it’s virtually impossible to prove where the employee actually contracted it. But COVID-driven legislation in many states is starting to change that. The New York Compensation Insurance Rating Board conducted a legislative analysis of the potential cost impacts of deeming COVID-19 virus exposure an occupational disease, estimating the price tag at more than $31 billion.
The potential impact for employers is a mixed bag. Overall workers’ compensation claims frequency could fall during the pandemic with fewer people working. On the other hand, the investment income that’s such a vital part of pricing for workers’ comp carriers has significantly declined, so carriers could raise premiums to recoup some of those losses.
How will COVID-19 impact WC rates?
Again, it’s still too early to tell. The National Council on Compensation Insurance (NCCI) is reporting that their loss cost/rate filings for this year will be based on pre-COVID-19 premium and loss data, and they won’t include any adjustment for the impact of the pandemic. But as the pandemic unfolds, rates could be affected by future events.
Four steps you can take now
Even though the ultimate impact of the COVID-19 pandemic on workers’ compensation remains a huge unknown, that doesn’t mean you should sit idle and wait to see what happens. Here are four proactive steps you can take to better manage claims and keep costs and premiums down.
- Develop a plan with your insurance partner for managing any increase in claims. With uncertainties about the compensability of COVID-19 exposure in the workplace and the risk of more fraudulent claims, all claims need to be thoroughly investigated. Claims should be proactively contained and claim reserves should be closely monitored.
- Utilize telemedicine. Already an increasingly popular treatment option, it’s become a way of life under social distancing guidelines. Coordinate with your claims advisors to determine when and how best to use telemedicine for injured workers.
- Communicate regularly with injured employees. Now more than ever, injured worker outreach is critical. Navigating the workers’ compensation process is already stressful for injured employees, and the uncertainties brought on by the pandemic are only compounding their anxieties. Focus on communication, education, and transparency to drive better claims outcomes and lower costs.
- Don’t neglect injury prevention training and education. During this hectic time, safety and injury prevention training can easily slip through the cracks. Make sure all employees understand the proper way to perform their tasks, avoid hazards, and minimize physical and mental stress.
Need help navigating your workers’ compensation program through this pandemic? Call the risk management professionals at BNC Agency today.