The COVID-19 pandemic and resultant stay-at-home orders are significantly impacting California’s economic, health care and workers’ compensation systems. Many COVID-19 workers’ compensation claims have already been filed. However, at this time, it is unclear what proportion of the illnesses and deaths resulting from the virus will ultimately be determined to be work-related.
On May 6, 2020, the Governor issued Executive Order N-62-20 (Order) providing for a rebuttable presumption of compensability for all workers directed by their employer to work outside the home. Key provisions of the Order include:
— Rebuttable presumption of compensability applied to workers contracting COVID-19 who worked outside of their home or residence at the employer’s direction within 14 days prior to diagnosis
— Presumption limited to dates of injury from March 19, 2020 to July 5, 2020
— Requires a positive test for COVID-19 or a diagnosis of COVID-19 by a licensed physician that is confirmed by a positive test within 30 days
— Temporary disability must be certified by a physician and can be offset by COVID-19 related sick leave
— Elimination of death benefits for workers with no dependents that are usually paid to the state
The WCIRB has evaluated the potential workers’ compensation claims cost arising from COVID-19 claims under the Order. While some of the workers who are directed to work outside their home during this period have filed or would file a compensable workers’ compensation claim in the absence of a rebuttable presumption, we had no basis to estimate this proportion and, as a result, made no estimate of the incremental impact of the Order. Also, since an actual positive test or diagnosis of COVID-19 is required for the Order to apply, our cost estimates exclude any potential costs for workers who are quarantined, but have not been diagnosed with COVID-19. Finally, our estimates reflect the potential cost impact arising from COVID-19 diagnoses during the time the Order applies and do not reflect costs for potential extensions of the Order or future legislation.
The cost estimates in this Research Brief are based on WCIRB data including unit statistical reports, aggregate financial data calls and medical transaction data. The WCIRB estimates that the cost of COVID-19 claims filed by workers subject to the Order ranges from $0.6 billion to $2.0 billion with a mid-range estimate of $1.2 billion. This mid-range estimate comprises 7% of the $18.3 billion estimated annual cost of workers’ compensation claims in the system prior to the pandemic.