A California law enacted last month that eases the path to workers’ compensation benefits for employees who contract COVID-19 will require an unprecedented level of documentation and communication between claims managers and employers.
“I have joked that this should be called a job-creation bill because of all the data tracking that is required,” said Brenna E. Hampton, managing partner in San Diego for the Hanna Brophy law firm, during a webinar on Wednesday. “Not a lot of people have found that funny.”
CorVel, a national third-party administrator based in Irvine, California, sponsored the webinar to educate employers and claims professionals about new data-tracking requirements that some employers consider onerous.
Michelle Tucker, vice president of enterprise workers’ compensation operations for CorVel, said for the first time claims adjusters will have to keep track of all reports of COVID-19 infections, even those that don’t result in claims. Employers bear the burden of reporting infections without identifying employees by name, while also logging the total number of workers at each worksite and the total number of infections at each.
The new data-tracking requirements are tied to the unique presumption created by California lawmakers with passage of Senate Bill 1159, which Gov. Gavin Newsom signed into law on Sept. 17. The bill took effect immediately. It replaces an executive order that Newsom issued in March and expired on July 6.
Tucker said the bill is easily the most complicated of any of the presumption laws, regulations and executive orders imposed by 19 states so far, showing once again that “in California, we like to go our own way.” She said CorVel has created a portal and forms that employers can use to report data about COVID infections. Sedgwick, a national third-party administrator based in Memphis, Tennessee, announced a similar “intake portal” for reporting COVID-19 positive test results.
The legislation limited the number of workers who will be granted a presumption that COVID-19 infections arose out of and in the course of employment. The presumption applies to all first responders and health care workers who have contact with COVID-19 patients. For that group, the employer or insurer must approve or deny the claim within 30 days, rather than the 90-day investigation period usually allowed by California law.
For other workers who have contact with the public, the presumption is applied only if there was an outbreak of the disease at the worker’s job site. For that group, employers must complete their investigation within 45 days. No presumption applies for employees who work from home.
The bill’s definition of an “outbreak” is driving much of the new data-tracking requirements.
The presumption comes into play only if four employees at a worksite contract COVID-19 within a 14-day period, or 4% of employees at a worksite for employers with 100 or more workers. It doesn’t matter if the worker contracted the disease at work elsewhere, which is why employers need to keep track of every employee who tests positive and report infections to their claims administrator, Hampton said. The law applies only to employers with five or more employees.
Tracking COVID-19 infections is just the start of it. Large employers also need to know exactly how many employees worked at each of their facilities so that they divide that by the number of infections to learn the percentage of workers infected, which will determine whether a presumption applies, Hampton said.
To make it even more tricky, the law says that the largest number of workers who were present at the worksite during the previous 45 days is used to determine the percentage. If an employee who works at multiple sites is infected, that infection is counted for each of those sites, Hampton said.
In sum, the law requires claims administrators and employers to keep track of two separate rolling numbers, each with a unique timeframe: The number of infections at each work site over the past 14 days divided by the maximum number of employees at that worksite over the past 45 days.
“There’s a lot of handholding and communication required to make this work,” Hampton said.
Jill Dulich, executive director of the California Self-Insurers Association, said the data tracking is a “significant challenge.”
“Many of the self-insureds have thousands of employees assigned to, and rotating between dozens of locations, so determining the highest number of co-workers at each location over the 45 days prior to the last day worked is nearly impossible,” she said in an email. “Tracking the positive cases is not a significant issue and that has largely been done since the COVID onset. While everyone continues to strive to comply with the requirements, they are very onerous and proving to be a huge test for the entire workers’ compensation community.”
During a telephone interview, CorVel’s Tucker questioned whether California employers would be better off with a broader infection with fewer data-reporting requirements. She said employers have been pushing lawmakers to revise the law to simplify compliance.
The California Workers’ Compensation Coalition, an employer group, offered to drop its opposition to SB 1159 before the legislature passed the bill if lawmakers dropped the portion of the bill that required employers to track the data used to decide if workplaces experienced COVID-19 outbreaks. The organization called the data-tracking requirements in the bill “administratively burdensome” and “unworkable for employers.” Lawmakers, however, rejected amendments offered by the group.
Coalition lobbyist Jason Schmelzer said in an email that the legislature will likely do some cleanup work to the legislation, which often happens when bills are passed on an emergency basis. But he said it is unlikely that lawmakers will revise the criteria for determining when an outbreak has occurred.
Hampton said employers who don’t comply with the data-tracking requirements can be fined up to $10,000 for each violation. She said fines will likely be less than that for first offenses, but the number will increase quickly if multiple violations are found.
She said California labor officials appear determined to keep a close eye on employers to ensure they don’t expose workers to COVID-19. She noted that the Department of Industrial Relations announced Sept. 30 that it is proposing fines ranging from $13,500 to $26,560 against five Los Angeles County grocery stores accused of failing to protect their workers from the coronarvirus by allowing too many customers in their stores.
The rules will get even tighter next year. Newsom also signed into law Assembly Bill 685, which takes effect on Jan. 1. The bill requires employers to provide written notice to all employees and subcontracted employees within one day of learning of any potential worksite exposure.Employers will also be required to notify the state Department of Public Health any time that they exceed the threshold for an outbreak as defined by SB 1159.
Attorneys say it is important for employers remember that a presumption does not mean every worker who files a claim qualifies for benefits. John P. Kamin, a defense attorney with the Bradford & Barthell law firm in Woodland Hills, heads up a COVID-19 response team for the law firm, which keeps claims professionals abreast of the voluminous requirements.
During a telephone interview, Kamin said it is crucial that claims adjusters build a timeline: When did symptoms begin? When was exposure suspected? What was the last date of work? When was a COVID-19 test done? When were the results known?
“If there are red flags on the claim, they will likely show up there,” Kamin said.
He gave this example: If the employee’s last day worked was July 8, but the date they first felt symptoms was Aug. 12 and they received the positive test result on Aug. 14. The claim is not compensable because the law requires a positive test result within 14 days of the last day the employee worked.
The legislation itself has built in defenses against claims. For one, an employee has to have worked away from his or her home to qualify. The outbreak criteria also must also be met, except for health care workers and first responders. But even claims that qualify for the automatic presumption can be defeated by showing that the worker had no direct contact with anyone suffering from COVID-19. For example, a clinic may have directed all COVID-19 patients to a part of the building where the claimant had never worked, Kamin said.
Claims that don’t qualify for the presumption can be defeated by a preponderance of evidence. A claim may be defeated if an adjuster can gather enough facts to show that the employer was great with protective personal equipment and supervisors were enforcing social distancing rules, Kamin said.
Social media can be a big help. Kamin said claimants have become more sophisticated about privacy settings in recent years, but some still post revealing information on Facebook or Instagram.
Fortunately for employers, Kamin said in the vast majority of COVID-19 cases the claimant recovers and are not interested in starting a legal battle with their employers.
“One of the first cases I remember, a gentleman was on a ventilator for six days,” he said. “He was so happy being out of the hospital and healthy again, he wasn’t interested in litigating the claim.”
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