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The California Workers Compensation Insurance Rating Bureau has released its COVID-19 in California Workers’ Compensation 2023 Update. Key highlights from the report are as follows:

Through July, a total of nearly 324,000 COVID-19 claims have been reported to the Division of Workers’ Compensation. Self-insured employers have reported more than half of the COVID-19 claims, whereas self-insured employer claims make up about one-third of non-COVID-19 claims. More than half of 2022 claims were reported in January during the Omicron surge, after which there was a notable and rapid decline to around 2% of claims.

During the first few months of the pandemic, COVID-19 claims accounted for nearly one in every seven indemnity claims in California. In December 2020, amid the peak of the initial winter surge, nearly one-third of all indemnity claims were attributed to COVID-19. Subsequently, following the vaccine rollout and a significant decline in spring 2021, the proportion of COVID-19 claims began to increase again, with the emergence of the Delta variant and the Omicron variant. This surge peaked in January 2022, with one-third of reported indemnity claims stemming from COVID-19.

Throughout the pandemic, the healthcare sector consistently had the highest proportion of indemnity claims related to COVID-19 within the insured sector. Public administration, which includes some first responders, also saw a significant number of COVID-19 claims. The share of indemnity claims related to COVID-19 has decreased across all industries. Through 2021, Manufacturing held the second highest share of COVID-19 claims among sectors. However, as the economy rebounded late in 2021 and during 2022, the second highest share of claims were from the Accommodation and Food Services sector.

Workers between the ages of 16 and 39 accounted for over half of all COVID-19 claims, a slightly higher proportion than that seen among all indemnity claims for younger workers. Throughout the pandemic, 80% of all COVID-19 death claims have been incurred by workers aged 50 years or older in contrast to less than one-third of all indemnity claims in this age group.

For AY 2022, approximately 70% of incurred losses on COVID-19 claims have originated from Temporary Disability (TD) only claims compared to less than half of the incurred losses on non-COVID-19 claims. A quarter of incurred losses on COVID-19 claims in AY 2022 are on death and PD claims. This marks a significant decrease from AY 2021 when half of the incurred losses on COVID-19 claims at first report (18 months) were related to death and PD claims.

Nearly all indemnity-only claims from AY 2022 have an incurred value below $5,000. While the incurred loss distribution for non-COVID-19 claims remained similar to that of AY 2021, a higher proportion of COVID-19 claims have less than $1,000 of incurred losses. In prior AYs, the shares of COVID-19 claims exceeding $500,000 were several times greater than that of non-COVID-19 indemnity claims. In AY 2022, the shares are similar, indicating a reduced filing of large COVID-19 claims in 2022.

Denial rates on COVID-19 claims have been higher than on non-COVID-19 claims, as on average, only about 8% of non-COVID-19 claims are denied and this has continued throughout the pandemic. Many COVID-19 claims are denied due to the lack of a positive test result for a COVID-19 infection. Generally, denial rates have been higher during the period Senate Bill No. 1159 has been in effect, with its less expansive presumption of compensability than early in the pandemic, when the Governor’s Executive Order was in effect.

Virtually all COVID-19 indemnity-only claims close quickly, as they typically involve only short durations of TD with nearly all claims closed by 18 months. COVID-19 claims with both indemnity and medical on average close more quickly than non-COVID indemnity claims as more have relatively small incurred values and have shorter TD durations.

Both indemnity and medical COVID-19 paid losses have developed less since year-end 2022 than non-COVID-19 claims paid losses. This lower paid loss development of COVID-19 claims has occurred because many AY 2022 COVID-19 claims close quickly and with shorter TD duration than non-COVID-19 claims.