The Division of Workers’ Compensation announced its Eureka satellite office will close the physical location at 409 K St. on July 1, 2021 and its operations will remain online.

By most accounts, the virtualization of matters proceeding through the litigation process has been a positive experience for the industry. Additionally, depositions have been successfully taken online. And some medical evaluations have been by telehealth.

The Eureka satellite office has conducted operations virtually since the COVID-19 pandemic began in 2020.

All Eureka matters will continue to be heard either by phone or video even after COVID-19 restrictions ease.

As of July 1, all filings that are sent by U.S. Mail should be directed to the Santa Rosa district office.

It is not known if this is a precursor to the “new normal,” or just the destiny for one of the smaller and remote offices of the statewide system. Over the next few months, the virtual evolution, if there will be one, will likely become more transparent.

In this time of uncertainty, one thing is for sure: the workplace of the future will look different than it does today. For some companies, offering telecommuting continues to be a viable option. At the other end of the spectrum, some employers will likely continue to require high physical proximity working environments for the foreseeable future.

NCCI conducted interviews with several industry professionals to better understand what the future workplace might look like and how new challenges are being addressed.

In speaking with interviewees, NCCI consistently heard that employers have taken similar measures and developed multifaceted risk mitigation strategies, such as:

– – Working remotely when possible
– – Applying social distancing
– – Conducting health/symptom screenings
– – Cleaning and disinfecting
– – Implementing workspace layout changes
– – Limiting visitors

Some employers were able to move to a full telecommuting model within a very short time, while others used what might be called a “hybrid” approach; that is, implementing safety controls for jobs that must be performed onsite, while encouraging telecommuting for employees who can effectively perform their jobs from home.

Employers are looking for ways to reduce travel and human-to-human contact, which may impact workplace congestion, shift work, group training, overnight travel, and the use of cleaning chemicals and tools/equipment. New technologies are enabling more physical distancing to address infectious disease prevention.

Examples include virtual meetings and training sessions, as well as touchless transactions, touchless printing, and wearable technology that supports contact tracing and signaling to prevent close physical proximity.

Insurance companies have many interactions with their customers in various ways, which are critical in this time. Insurers’ roles involve exposure assessment, claims mitigation, loss prevention, audits, etc. Insurers indicated that they are taking similar proactive approaches and have already started to develop new evaluation methods to address physical proximity exposures, while simultaneously providing education and services to their customers.

Examples include using telesurveys and virtual visits for analysis, loss prevention, and audit services to cut back on in-person activity. One insurer noted that policyholders have expanded the duties of their employees to an all-hands-on-deck approach due to workforce cutbacks.

A new series of studies, CompScope Benchmarks, 21st Edition, from the Workers Compensation Research Institute provides in-depth analysis of costs per claim and other performance metrics across 18 state workers’ compensation systems for claims with experience through March 2020 for injuries up to and including 2019.

“The CompScope studies can help policymakers and other stakeholders identify current cost drivers and emerging trends in a wide variety of workers’ compensation system components,” said Ramona Tanabe, executive vice president and counsel of WCRI. “The studies include experience on claims through March 2020, at the very beginning of the coronavirus (COVID-19) pandemic, so they are a good baseline for evaluating the impact of the virus on workers’ compensation claims.”

The 18 states in the study are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. There are individual reports for every state except Arkansas, Iowa, and Tennessee.

The state studies explore the time from injury to first indemnity payment, the average total cost per claim, the average payment per claim for medical care, and the average payment per claim for indemnity benefits, as well as how state results may reflect system features and processes.

The following are sample findings for some of the study states:

– – California: Total costs per claim with more than seven days of lost time in California have been mostly stable since 2010. In 2019, the most recent year in the study period, total costs per claim increased 4 percent, which was largely driven by a 6 percent increase in indemnity benefits per claim.
– – Florida: From 2014 to 2018, total costs per claim with more than seven days of lost time in Florida had been growing moderately at 4 percent per year at all claim maturities. In 2019/2020, this measure increased 8 percent, driven by faster growth in indemnity benefits and medical payments per claim in the latest 12-month valuation. Growth in costs per claim in Florida since 2014 was faster than in most states.
– – Georgia: Total costs per claim with more than seven days of lost time have remained fairly stable in Georgia since 2008 and were higher compared with other study states. Higher indemnity benefits per claim and litigation expenses per claim in Georgia were the main drivers of the higher-than-typical total costs per claim.
– – Illinois: Total costs per claim with more than seven days of lost time in Illinois have grown between 1 and 3 percent per year since 2012, based on claims with 12-48 months of maturity. This growth reflects small increases in medical payments per claim, indemnity benefits per claim, and benefit delivery expenses per claim.
– – Indiana: Total costs per claim in Indiana increased 3 percent per year from 2014 to 2019 for claims with more than seven days of lost time at 12 months of experience. Those results, however, mask underlying changes from 2014 to 2016 in the key cost components – medical, indemnity, and benefit delivery expenses (expenses for managing medical costs and litigation expenses allocated to claims) – related to provisions of House Enrolled Act 1320.

For more information on these studies, visit https://www.wcrinet.org/compscope-benchmarks-21st-edition.

The sections of the Social Security Act known as the Medicare Secondary Payer (MSP) provisions were originally enacted in the early 1980s and have been amended several times, including by the MMSEA Section 111 mandatory reporting requirements.

Medicare has been secondary to workers’ compensation benefits from the inception of the Medicare program in 1965. The liability insurance (including self-insurance) and no-fault insurance MSP provisions were effective December 5, 1980.

Workers’ compensation is a primary payer to the Medicare program for Medicare beneficiaries’ work-related illnesses or injuries. Medicare beneficiaries are required to apply for all applicable workers’ compensation benefits. If a Medicare beneficiary has workers’ compensation coverage, providers, physicians, and other suppliers must bill workers’ compensation first. If responsibility for the workers’ compensation claim is in dispute and workers’ compensation will not pay promptly, the provider, physician, or other supplier may bill Medicare as primary. If the item or service is reimbursable under Medicare rules, Medicare may pay conditionally, subject to later recovery if there is a subsequent settlement, judgment, award, or other payment.

The Benefits Coordination & Recovery Center (BCRC) consolidates the activities that support the collection, management, and reporting of other insurance or workers’ compensation coverage for Medicare beneficiaries. The BCRC updates the CMS systems and databases used in the claims payment and recovery processes.

The BCRC assists in the implementation of MMSEA Section 111 mandatory MSP reporting requirements as part of its responsibilities to collect information to coordinate benefits for Medicare beneficiaries on behalf of CMS.

Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111) adds mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan (GHP) arrangements, and for Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation.

Implementation dates were January 1, 2009, for GHP arrangement information and July 1, 2009, for information concerning liability insurance (including self-insurance), no-fault insurance and workers’ compensation.

CMS continues to update and implement the Section 111 requirements. New versions of the Section 111 User Guide will be issued when necessary to document revised requirements, and when additional information has been added for clarity.

On April 5, 2021, CMS published NGHP Section 111 User Guide (Version 6.3).

This Policy Guidance Chapter of the MMSEA Section 111 NGHP User Guide provides an overview of Section 111 related legislation and MSP rules, as well as information describing the policy framework behind the MSP liability insurance (including self-insurance), no-fault insurance and workers’ compensation reporting requirements mandated by Section 111 MMSEA.

The other four chapters of the NGHP User Guide (Introduction and Overview, Registration Procedures, Technical Information, and Appendices) should be referenced as needed, for applicable guidance.

According to an article by Fisher Phillips, recent California class and collective lawsuits are starting to reveal a particular trend of litigation where employees are claiming unreimbursed work-related expenses.

For instance, a Private Attorneys General Act (PAGA) action filed on January 15 in the Superior Court of Merced alleges that Foster Farms failed to provide and reimburse employees for the cost of personal protective equipment (PPE). Specifically, the employees allege that they were forced to purchase PPE such as masks, gloves, and hand sanitizer without reimbursement.

In their complaint, the employees argue that California case law requires employers to provide their employees with PPE, at the employer’s expense, and employees must be reimbursed for any such materials that the employees purchase if the employer fails to do so.

In another recent 2021 lawsuit, a class action filed in Orange County Superior Court, the employee alleges that Anyone Home, Inc. failed to provide reimbursement for her and other similarly situated employees’ home internet, home telephone, personal cell phone, personal computer, utility costs, office furniture, and insurance from July 2019.

In both of these cases, the employees allege they were required to purchase alleged necessary business expenses but not reimbursed for these purchases.

Both cases are at their infancy, and no court has made a ruling on the merits of the allegations raised in either case.

California Labor Code § 2802 explicitly requires employers to reimburse their employees for the necessary business expenses that they incur. Specifically, employees must be reimbursed for expenses that are necessarily incurred in direct consequence of their job duties or in complying with an employer’s directions. In general, the law only requires reimbursement of necessary and reasonable expenses; unnecessary or unreasonably exorbitant expenses need not be reimbursed.

Traditionally, most remote work expenses have not been reimbursable because most employers’ telecommuting and remote work programs were typically voluntary and not required.

However, in today’s COVID-19-regulated environment, remote work has become mandatory for many industries, therefore changing certain employers’ reimbursement obligations. When remote work is mandatory – even if ordered by California or local authorities – employees must be reimbursed for the necessary expenses they incur while working at home. The issue of whether certain expenses were “necessarily incurred” by an employee is subject to court scrutiny and various employer defenses.

Regrettably, the California Labor Commissioner’s office has failed to issue COVID-specific expense reimbursement guidance to aid employers in navigating this new vast remote work environment.