Tag: 2023 News

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.

In July 2016 Anel Perez filed a civil complaint against Galt Joint Union Elementary School District. which alleged that she was acting as a volunteer for the spelling bee held at River Oaks Elementary School, which is owned or in the possession of the Galt Joint Union Elementary School District.

The complaint alleges that on December 4, 2015, while attending the event, she fell off the school’s auditorium stage and down an adjacent stairway, causing catastrophic injury to her.

The School District filed an answer to the compliant in November 2016, but the affirmative defenses in this initial answer did not include anything regarding the availability of workers’ compensation coverage. In late 2018, the District filed a successful motion for leave to amend its answer to the complaint which added an affirmative defense of the workers’ compensation exclusive remedy.

The litigation was bifurcated, and Phase 1 involved only the applicability of the exclusive remedy defense, and would address if a resolution adopted under Labor Code section 3364.5 applied to the School District, such that Perez’s sole and exclusive remedy would be workers’ compensation.

Dr. Karen Schauer, who testified that she was the superintendent of the “Galt Joint Union Elementary School District.” . Schauer’s testimony and the evidence she presented touched on three key issues: the 1968 adoption of a resolution pursuant to Labor Code section 3364.5 by the governing board of the “Galt Joint Union School District,” the names by which the district identifies itself, and her use of school principals as her designees.

Plaintiff testified she had two children who attended River Oaks Elementary at the time of the accident, and she was a frequent volunteer at the school. She was vice president of the PTA. Plaintiff testified that the PTA president asked her to volunteer at the bee the day before the event. Plaintiff agreed that during the time of the spelling bee and before her fall, she “understood that [she] w[as] under the direction and control of Ms. Yount who was in essence running the spelling bee.”

Lois Yount has worked for “Galt Joint Union Elementary School District” for 20 years. She used to work as a school administrator at River Oaks Elementary. As a school administrator, she would oversee every aspect of the school, including student safety and staff safety, day-to-day happenings, and school functions. She would serve as a leader of instruction, maintenance, and operation. Her direct supervisor, with whom she would communicate on an on-going basis, was the district superintendent.

After conclusion of the Phase 1 trial, the court entered judgment in favor of the District on the ground that a resolution passed under Labor Code section 3364.5 in 1968 by the “Governing Board of Galt Joint Union School District of Sacramento and San Joaquin Counties” for the “Galt Joint Union School District” converted plaintiff’s status to that of an employee under the Act, rendering workers’ compensation the sole and exclusive remedy to compensate plaintiff for her injuries.

The Court of Appeal affirmed the trial court in the published case of Perez v. Galt Joint Union Elementary School District -C092691 (September 2023).

Generally, a person “performing voluntary service[s] for a public agency . . . who does not receive remuneration for the services” is excluded from the definition of “employee” under the Workers Compensation Act. (Lab. Code, § 3352, subd. (a)(9).)

However, under certain circumstances, usually upon the governing board’s adoption of a resolution, volunteers of statutorily identified organizations can be deemed employees under the Act. (See, e.g., Lab. Code, §§ 3361.5-3364.7.) One such exception to the exclusion of volunteers from the definition is contained in Labor Code section 3364.5, and applies “upon the adoption of a resolution of the governing board of the school district” to “person[s] authorized by the governing board of a school district or the county superintendent of schools to perform volunteer services for the school district” who are injured “while engaged in the performance of any service under the direction and control of the governing board of the school district or the county superintendent.” (Lab. Code, § 3364.5.)

In response to the plaintiff’s arguments against application of § 3364.5 the Court of Appeal concluded: (1) that so long as a resolution has been passed at some point by the governing board of a district and not later rescinded, Labor Code section 3364.5 does not require that district board members and staff be aware of the statute at the time a volunteer is injured in order for it to apply; (2) district board members do not need to know about and authorize a specific volunteer’s involvement in a specific activity for the exception to apply; and (3) district board members do not need to directly control and direct a volunteer’s actions for the exception to apply.

“The broad purpose of Labor Code section 3364.5, reflected in the legislative history, reinforces our decision that the statute does not apply just in the narrow circumstances and to the narrow class of volunteers to which plaintiff’s reading would have us apply the statute.”

The California Flats Solar Project is a large solar power plant built on part of a former cattle ranch in the southeastern corner of Monterey County. Granite Construction was involved as a subcontractor in the construction of this project.

The Monterey County Planning Department required the primary project contractor to prepare and implement a worker training program about Valley fever before any grading activity. Consistent with these requirements, the owner of the project site created a Valley fever fact sheet, a Valley fever training program, and a Valley fever management plan for the project. The project general contractor, in turn, created a safety plan that identified Valley fever as a potential risk and described methods for mitigating this risk. Granite Construction also discussed Valley fever in safety instructions to its employees.

In May 2017, Cal/OSHA began an inspection of the project worksite, which ultimately centered on the potential exposure of Granite Construction’s employees to Coccidioides, the fungus which causes Valley fever. During their site visits, Cal/OSHA staff did not wear respiratory protection to prevent their own potential exposure to Coccidioides. Nor did they test the site for Coccidioides, though staff assumed that tests were available to determine the presence of the fungus. No evidence in the record shows that any Granite Construction employee contracted Valley fever. Nor does any testimony show that any person who visited the worksite contracted Valley fever.

Cal/OSHA issued a citation to Granite Construction for allegedly violating three regulations. It alleged Granite Construction violated one regulation because it required its employees to wear masks without first providing a medical evaluation to determine their fitness to wear them. And it alleged the company violated two other regulations because it exposed its employees to dust containing a harmful fungus – namely, Coccidioides, the fungus that causes Valley fever – and failed to implement adequate measures to limit this exposure.

After Granite Construction disputed these allegations, an ALJ rejected the Division’s claims. The ALJ reasoned that no credible evidence showed that Granite Construction required its employees to wear masks and no reliable evidence showed that Coccidioides was present at the worksite.

But after the Cal/OSHA petitioned for reconsideration, the Occupational Safety and Health Appeals Board reversed on these issues and ruled for Cal/OSHA. The trial court later denied Granite Construction’s petition for writ of administrative mandate seeking to set aside the Board’s decision.

On appeal from the trial court, the Court of Appeal reversed in the published case of Granite Construction Co. v. Occupational Safety and Health Appeals Bd. – C096704 (September 2023). It agreed with Granite Construction’s claim that insufficient evidence shows its employees were exposed to Coccidioides. But it ejected its additional claim that it allowed (rather than required) its employees to wear masks, finding sufficient evidence supports the Board’s contrary ruling on this point.

Granite Construction challenged the Board’s finding that it violated California Code of Regulations, title 8, section 5144(a)(1) – a finding that was largely premised on the Board’s conclusion that the company exposed its employees to Coccidioides because no evidence showed Coccidioides was present at the worksite.

Over the years, the Board has discussed two competing standards for evaluating whether an employee has been exposed to an atmospheric contaminant within the meaning of this regulation. It established the first standard – the “harmful exposure” standard – decades ago. Under this standard, the Division must show “ ‘[a]n exposure to dusts, fumes, mists, vapors, or gases . . . [o]f such a nature by inhalation as to result in, or have a probability to result in, injury, illness, disease, impairment, or loss of function.’ ”

The Board has since suggested that an alternative standard – the “zone of danger” standard – might be more appropriate in evaluating alleged violations of section 5144(a)(1). Under this alternative standard, the Division must show either that the employees have been or are in the zone of danger or ‘that it is reasonably predictable by operational necessity or otherwise, including inadvertence, that employees have been, are, or will be in the zone of danger.

To date, the Division has yet to decide which of these two standards – the “harmful exposure” standard or the “zone of danger” standard – is the appropriate one in cases involving alleged violations of section 5144(a)(1). It has instead, in each case it has considered these standards, found it unnecessary to decide between the two standards because it concluded that both favor the same result.

In its decision here, the Board noted that the “harmful exposure” standard is the one it has applied in past decisions involving section 5144(a)(1). But at the same time, it noted it might have reason to “overrule” this approach and apply the “zone of danger” standard – which it characterized as its “typical exposure analysis.”

The Court of Appeal concluded that under either standard, the Board’s finding that employees were exposed to dusts containing Coccidioides lacks evidentiary support.

“Here, however, nothing we have found in the record shows that any part of the worksite “present[ed] [a] danger to employees.” The CDC, to be sure, has said Coccidioides is endemic in California. But that does not mean that the fungus is present everywhere in the state (or for that matter, everywhere in Monterey County) – which even Division staff conceded.”

“The Department of Industrial Relations, moreover, has indicated that Monterey County and seven other counties have relatively high rates of Valley fever, with rates over 10 per 100,000 people. But that does not mean that Coccidioides was present (or even likely present) at the worksite here. Nor does it even show a meaningful probability that the fungus was present.”

And although Monterey County and even Granite Construction demonstrated concerns about Valley fever and took steps to limit potential exposure, that too does not show that Coccidioides was actually present. All this evidence instead only shows, with no degree of certainty, that the worksite might have presented a danger to employees because Coccidioides might have been present in the soil. That, however, is insufficient to support the Board’s finding that the worksite was in fact a zone of danger.”

A new California Workers’ Compensation Institute study finds that average paid losses on California workers’ compensation lost-time claims fell immediately after legislative reforms (SB 863) took effect a decade ago, but then gradually increased up until the pandemic hit.

Currently, average paid losses on claims at all valuation points within 60 months of injury are above their post-reform lows, with only the most developed data on older claims — 72-month data on accident year (AY) 2016 claims — still showing declines in loss payments in the wake of the 2012 reforms.

Using data from CWCI’s Claims Monitoring Application on nearly 570,000 indemnity claims for injuries that occurred during the 10-year span ending in December 2022, the study tracks average paid losses at 6, 12, 24, 36, 48, 60 and 72 months post injury, breaking out the results by accident year to identify growth trends.

In addition to average total losses, the study notes the average medical and indemnity payments at each level of development and compares the loss payments for claims from 5 key industry sectors and from different regions of the state.

Average total paid losses within the first year of injury fell immediately after the 2012 reforms took effect but bottomed out in AY 2014 and started to trend up in AY 2015, continuing to increase through AY 2020. Average 24-month loss payments bottomed out in AY 2016, then trended up through AY 2019, the latest year for which 24-month data are available.

For the first time in 7 years, the 6- and 12-month average paid losses fell slightly in AY 2021 (the second year of the pandemic) while the 6-month payments on AY 2022 claims edged up slightly, so average total losses in the initial months after injury have changed little since the pandemic began.

Unlike the 6-, 12- and 24-month data, there are no COVID claims in the 36-, 48-, 60- and 72-month results as data at those levels of development is not available beyond AY 2019 and the pandemic began in AY 2020. More developed data on older claims show average total losses declined through AY 2016, but beginning with AY 2017 claims, paid losses at 36, 48, and 60 months began to rise, so the 72-month trendline, which now runs through AY 2016, is the only one that is still declining from the post-SB 863 level.

A review of average 24-month paid medical losses shows they declined from AY 2013 through AY 2016, but between AY 2017 and AY 2020 they jumped by 16.6%, which helped fuel the increase in the 24-month total loss trend. Much of that increase occurred in AY 2019 (+4.5%) and AY 2020 (+6.2%), and notably, 24-month data on claims from both those years included payments for medical services delivered during the pandemic.

Temporary disability comprises most of the indemnity paid in the first 2 years after a job injury, and despite some year-to-year fluctuations, the average indemnity paid at 6 months increased 40.6% from AY 2013 to AY 2022, the average indemnity paid at 12 months rose 27.7% from AY 2013 to AY 2021; and the average indemnity paid at 24 months fluctuated from AY 2013 to AY 2017 but increased for AY 2018, AY 2019, and AY 2020 claims, resulting in a 22.7% net increase between AY 2013 and AY 2020.

In the first few years after SB 863 took effect, the 36-month trendline for indemnity payments tracked with those at the shorter development periods, first fluctuating in a narrow range then gradually trending up to a peak in AY 2019. Average indemnity payments at the longer-term valuations, which are more affected by PD, were flatter, with a net increase of 3.4% in the 48-month payments from AY 2013 to AY 2018; a net decrease of 1.3% in the 60-month payments from AY 2013 to AY 2017; and a net decrease of 1.8% in the 72-month payments between AY 2013 and AY 2016.

The Institute study also examines differences in 24-month total loss trends for AY 2013 to AY 2022 indemnity claims from 5 industry sectors (construction; health care; clerical; food service; and agriculture); and for claims from injured workers living in 7 distinct regions of the state (San Diego, the Inland Empire/Orange County; Los Angeles County; the Central Coast; the Central Valley, the Bay Area, and the North Counties/Sierras), as well as for claims from out-of-state workers.

CWCI has published its study in a Research Update report, “California Workers’ Compensation Claims Monitoring: Medical & Indemnity Development, AY 2013 – AY 2022.”

National Nurses United, with nearly 225,000 members nationwide, is the largest union and professional association of registered nurses in U.S. history.

In 2009, California Nurses Association/National Nurses Organizing Committee played a lead role in bringing state nursing associations across the nation together into one national organization, National Nurses United (NNU). At its founding convention, NNU adopted a call for action to counter what it called “the national assault by the healthcare industry on patient care conditions and standards for nurses,” and to promote a unified vision of collective action for nurses.

This legislative year, nurses across California were instrumental in the introduction of A.B. 1156, authored by Assemblymember Mia Bonta (D-Oakland) and sponsored by California Nurses Association (CNA). The organization held a press conference about the proposed law on April 5 at the Kaiser Permanente Oakland Medical Center.

This bill would define “injury,” for a hospital employee who provides direct patient care in an acute care hospital, to include infectious diseases, cancer, musculoskeletal injuries, post-traumatic stress disorder, and respiratory diseases. The bill would include the 2019 novel coronavirus disease (COVID-19) from SARS-CoV-2 and its variants, among other conditions, in the definitions of infectious and respiratory diseases. The bill would create rebuttable presumptions that these injuries that develop or manifest in a hospital employee who provides direct patient care in an acute care hospital arose out of and in the course of the employment. The bill would extend these presumptions for specified time periods after the hospital employee’s termination of employment.

Fortunately for California employers, A.B. 1156 was last found In the Assembly Insurance Committee as of March 2023. It failed deadline the deadline to move from policy committee to fiscal committee as of April 28, 2023. Thus the measure did not proceed to be passed by the Legislature in the current session, but technically is still alive for 2024 consideration.

The California Chamber of Commerce, and a number of other business organizations opposed A.B. 1156. It pointed out that in 2019, SB 567 (Caballero) included presumptions for a very similar, more narrow list of illnesses and injuries. The Senate Committee on Labor, Public Employment and Retirement issued an analysis concluding that there was no evidence supporting the need for this presumption. It also warned that “the creation of presumptive injuries is an exceptional deviation that uncomfortably exists within the space of the normal operation of the California workers’ compensation system,” and to not limit them “would essentially consume and undermine the entire system”.

Two of the most recent iterations of this bill, SB 893 (Caballero) and SB 567 (Caballero) received 0 and 1 Aye votes in committee, respectively. SB 213 (Cortese) did not receive a motion in Assembly Insurance last year.

In 2014, AB 2616 (Skinner), the only version to make it to the Governor’s desk, was vetoed by Governor Edmund G. Brown, Jr. In his veto message he stated, “This bill would create a first of its kind private employer workers’ compensation presumption for a specific staph infection — methicillin-resistant Staphylococcus aureus (MRSA) — for certain hospital employees. California’s no-fault system of worker’s compensation insurance requires that claims must be ‘liberally construed’ to extend benefits to injured workers whenever possible. The determination that an illness is work-related should be decided by the rules of that system and on the specific facts of each employee’s situation. While I am aware that statutory presumptions have steadily expanded for certain public employees, I am not inclined to further this trend or to introduce it into the private sector.”