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A new 253 page report describes work undertaken by the RAND Corporation for the California Commission on Health and Safety and Workers’ Compensation (CHSWC) in the Department of Industrial Relations (DIR).  The goal of this study is three-fold:

(1) evaluate the overall impacts of COVID- 19 claims on California’s workers’ compensation system,
(2) evaluate the overall impacts of COVID-19 claims on California’s workers’ compensation indemnity benefits, medical benefits, and death benefits, including differences in the impacts across differing occupational groups, and
(3) assess the overall and cost impacts of the frontline worker and outbreak presumptions created by Senate Bill (SB) 1159 on California workers’ compensation system.

Senate Bill 1159, which was signed into law on September 17, codified this temporary presumption and introduced distinct presumptions for two groups of workers who fell ill with COVID-19 on July 6, 2020 or later:

– – Labor Code section 3212.87 covers specified health-care workers and workers in specified health care facilities, active firefighters, and peace officers primarily engaged in active law enforcement. We refer to this presumption as the frontline presumption.
– – Labor Code section 3212.88 covers workers not covered by the frontline presumption who tested positive for COVID-19 while working outside the home during an outbreak period at their job site. We refer to this presumption as the outbreak presumption.

These presumptions, which remain in effect until January 1, 2023, apply to workers meeting these criteria who test positive for COVID-19 using a polymerase chain reaction (PCR) test.

RAND conducted a mixed-methods study analyzing claims outcomes overall and by industry and occupation from the Workers’ Compensation Information System (WCIS) between January 2020 and June 2021.COVID-19 accounted for over 20 percent of claims in June and July of 2020 and peaked at 55 percent of claims in December 2020. Applicants filed a total of 82,000 claims filed for December 2020 injury dates. In comparison, in the decade before the pandemic (2010 to 2019), there had never been more than 68,000 claims filed in a single month.

During the first wave of the pandemic, the volume of non-COVID-19 claims dropped sharply following the statewide stay-at-home order, and so total claim volumes dropped early in the pandemic and were 25 percent lower than the volume typical before the pandemic during the temporary presumption period. Total claim volumes in most months since July 202 have remained below pre-pandemic levels.

COVID-19 claims are denied much more often than non-COVID-19 claims. Depending on the time period, denial rates on COVID-19 claims across all occupations have ranged from 44 percent for claims filed before any presumptions were in effect, 26 percent during the temporary presumption, and 34 percent after the outbreak and frontline presumptions took effect. Denial rates on non-COVID-19 claims filed at these times were 13 percent, 14 percent, and 10 percent, respectively. Denial rates varied widely across workers covered by different presumptions and, within groups of workers covered by the same presumption, across industries and occupations.

The main factor influencing whether a worker filed a claim was having access to federal and state COVID-19 paid leave. Workers then decided to file a workers’ compensation claim when their need for time off exceeded the time available from these other federal and state paid leave programs. Workers were able to access medical care for COVID-19 without using workers’ compensation, suggesting that workers’ compensation medical care benefits for COVID-19 were not critical to helping most workers receive needed care.

Overall, its study uncovered several challenges with the functioning of the workers’ compensation system during the pandemic. For employers, these challenges primarily related to handling a large, fluctuating volume of claims within shortened claim administration timeframes for making an initial claim decision.

For workers, confusion around filing a COVID-19 claim presented challenges, including questions about what occupations were covered and qualified for workers’ compensation under the presumption and whether a positive COVID-19 test was needed. In the face of these challenges, we consider how the specific aspects of the presumptions identified by SB 1159 impacted workers and employers within the workers’ compensation system.