Navigating Changing Legislation Where Health and Compliance Matter
While it will take time to consider the full impact of the pandemic, early claims data has allowed us to get a picture of its effect on the industry, including the makeup of COVID-19-related claims. In this session at RIMS 2021, experts discuss COVID-19’s impact on the claims experience, both in the occupational and non-occupational space.
Guests included:
- Bryon Bass – Senior Vice President, Disability and Absence Practice & Compliance, Sedgwick
- Max Koonce – Chief Claims Officer, Sedgwick
COVID-19 Claims Trends
Non-occupational workforce absence includes short-term disability programs and paid leave programs, required at the statutory level or offered as an employer benefit. These benefits also include unpaid leave of absences, like FMLA and state-required statutes. Within the non-occupational space, Sedgwick has processed almost 1.7 million claims related to COVID-19. When evaluating the makeup of these claims, most are concerning individuals with COVID-19-related symptoms that end up not testing positive, followed closely by individuals who have tested positive and need to quarantine, and then those individuals who have been exposed, but did not test positive and still need to quarantine. Another source of these claims concerns employees needing time off due to school closures related to COVID-19. Statutory requirements at both the state and municipal levels required employers to provide this benefit since many employees had to manage in-home schooling in addition to their full-time jobs. In terms of peaks for non-occupational workforce absence claims, Sedgwick saw a 5-day span around April 6, 2020, where over 16,000 claims were filed, relating to COVID-19. Another peak came early this year after the holidays, around January 5, 2021, where over 19,000 COVID-19 claims were filed.
Comparatively, the workers’ compensation space did not see nearly as many COVID-19-related claims. While there was a large increase in the number of overall claims, the number of COVID-19-related claims was contingent on the client base. Sedgwick carries a large healthcare group, retail establishment and a large group of public entities which represents the vast majority of the COVID-19 claims. There were a small number of liability claims, but industry publications are predicting increases in this area as businesses resume pre-pandemic operations. Claims for workers’ compensation peaked in 2020, hitting in the early spring, summer, and around November and December, with a significant decrease occurring in February 2021. As far as these claims’ severity, 90% of COVID-19-related claims required minimal time off work, with little to no necessary medical treatment. Under 2% of COVID-19-related claims required ICU treatment or extended time off of work.
Leave of Absence Durations
For an individual to receive short-term disability benefits, they must meet the definition as defined by the employer, and typically this requires medical documentation from a healthcare provider. However, with the healthcare system already exhausted, and the restrictions presented by COVID-19, Sedgwick encouraged employers to relax this definition. This meant that anything beyond the initial 14-day quarantine should require medical documentation, but those directed to take leave by a medical professional didn’t need to provide it up front. Sedgwick saw an average leave duration of 20 days with an average associated cost of $1700.Comparably, unpaid leave of absences saw an average duration up to 28 days since this benefit includes care that extends beyond just a sick individual—it allows for an employee to care for a sick family member and also included leave related to recent school closures.
Most workers’ compensation claims saw a relatively short duration of leave, with 90% of COVID-19-related claims closed within 60-75 days. The more extensive claims with fatalities or long-term medical needs remain open for some time.
Other Considerations
While there was major concern for interruption of care for injured employees, the rise of telehealth over the course of the pandemic was able to fill some needs. Over 20% of care for workers’ compensation claims was provided through telehealth during the pandemic—a major increase from the .5% makeup prior to the pandemic. Now, with telehealth becoming part of normal care considerations, it still makes up around 10% of provided care. Non-occupational workforce absence has also seen a major increase in the use of telehealth, with the Department of Labor now classifying it as a permanent option for FMLA qualifications. While this was not permitted prior, this option has prevented the healthcare system from becoming overburdened.
Presumption laws have also become a cause for concern with these laws being extended in certain states and may possibly include retroactively reevaluating compensability of past COVID-19 claims. Most employers will need to focus more on OSHA considerations with the change in the Biden administration. While we may not know what to expect just yet, it’s been predicted that there will be a major shift in its role. Although litigation saw a slowdown due to a decrease in liability claims, the courts have seen a major backlog. Until the backlog is cleared, the most impactful action is to continue pursuing a resolution.