Paid Leave Concerns When Employees Get COVID-19 Twice – Law360.com

https://www.law360.com/articles/1291176

Law360 (July 15, 2020, 4:21 PM EDT) —

Mark Konkel
Mark Konkel
Maria Biaggi
Maria Biaggi
Nicholas Kromka
Nicholas Kromka

The coronavirus has been novel in more ways than one. On one end of the spectrum, employers confront new questions of almost philosophical dimensions.

How much risk is too much risk? What risks should we ask our employees to accept? Where is the line between ordinary risk — the kind that employees undertake when they walk out the door every day to go to work — and the extraordinary risks posed by a pandemic from which, in the end, employers cannot entirely shield their workforces?

A seemingly more mundane novelty is the plethora of new COVID-19 laws and regulations. Compliance should just be a matter of reading a statute and, well, complying. But even there, an evolving real-world pandemic potentially makes compliance just as complicated.

One example we have helped our clients wrestle with involves exactly this kind of straightforward-on-paper, tricky-in-practice complexity.

One requirement of the Families First Coronavirus Response Act appears to be simple: When an employee working for an employer with under 500 employees gets sick with COVID-19, is seeking a COVID-19 diagnosis, or is subject to a quarantine order of a doctor or a government, they are entitled to up to 80 hours of emergency paid sick leave.

And that made perfect sense when the law was hurriedly drafted: You get sick once, and you do not get sick again, right?

Wrong. Mounting evidence now shows that contracting COVID-19 does not confer absolute immunity and that many individuals have now contracted the novel coronavirus more than once. So what happens when an employee exhausts his or her 80-hour emergency paid sick leave entitlement, recovers from COVID-19, and then contracts it again?

What are the basic requirements of the FFCRA?

Under the FFCRA, full-time and part-time employees who are unable to work or telework due to one of the qualifying reasons below may take up to 80 hours of paid sick leave.

  • The employee is subject to a federal, state or local quarantine or isolation order related to COVID–19.
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.
  • The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
  • The employee is caring for an individual who is subject to the first or second reason above.
  • The employee is caring for his or her child if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID–19 precautions.
  • The employee is experiencing any other substantially similar condition specified by the secretary of the U.S. Department of Health and Human Services in consultation with the secretary of the U.S. Department of the Treasury and the secretary of the U.S. Department of Labor.

An employee who contracts COVID-19 may be eligible to take 80 hours of emergency paid sick leave for one or more of the above-qualifying reasons. However, they may only take 80 hours of paid sick leave once.

That is, the language of the FFCRA is arguably quite clear that two weeks of emergency paid sick leave is all an employee is entitled to within one Family and Medical Leave Act period, i.e., 12 months, whether a calendar year, another fixed 12-month leave year, etc.

The new legislation, effective April 1 to Dec. 31, was quickly drafted in March when the coronavirus was still novel. But while there is still so much that is unknown about COVID-19, we can no longer assume that an individual who has been infected with COVID-19 and recovers, will not be able to get the virus again.

In the U.S., people are reporting testing positive for the virus after having recovered from an initial infection.[1] According to the Centers for Disease Control and Prevention:

When a positive test occurs less than about 6 weeks after the person met criteria for discontinuation of isolation, it can be difficult to determine if the positive test represents a new infection or a persistently positive test associated with the previous infection. If the positive test occurs more than 6-8 weeks after the person has completed their most recent isolation, clinicians and public health authorities should consider the possibility of reinfection.[2]

And, of course, persons who are determined to be potentially infectious should undergo evaluation and remain isolated.

In April, the DOL issued guidance which also confirms the plain language of the FFCRA’s FMLA Expansion Act. That is, employees are not entitled to any more than 12 weeks of FMLA leave in a 12-month period, regardless of whether an employee takes paid leave under the FMLA Expansion Act or regular unpaid FMLA leave for reasons unrelated to COVID-19.

The FMLA Expansion Act does not add additional job-protected leave time. Rather, it adds additional qualifying reasons to take leave. Thus, an employee who takes 12 weeks of FMLA leave, does not have an additional 12 weeks of leave under the act because he or she is, for example, experiencing symptoms of COVID–19 for a second time and seeking another medical diagnosis.

Moreover, employees who may have taken FMLA leave for reasons other than the public health emergency in the preceding leave year may have reduced leave time under the FMLA for purposes of the public health emergency. This may have the unfortunate effect of potentially leaving those who are most vulnerable with less leave time than employees who have not needed to use regular unpaid FMLA leave for their own serious health condition. Also, the FFCRA only applies to employers with 500 or fewer employees.

New York employers are required to comply with both the FFCRA and the New York Emergency Paid Sick Leave Law, or EPSL. The benefits available under the EPSL vary based on the size and net income of the employer.

Under the EPSL, private employers with 100 or more employees are required to provide their employees with at least 14 days of paid sick leave. Employees in New York are eligible for benefits under the EPSL when the benefits provided by that law are in excess of those provided under the FFCRA.

In this situation, employees would be entitled to federal benefits, plus the difference in benefits provided under the FFCRA and the EPSL. In other words, no double dipping. And, unless the employee has to care for a family member with a serious health condition, he or she would not be entitled to New York paid family leave.

Given all this, there is no statutory obligation under the FFCRA to provide employees with additional paid leave in the unfortunate circumstance that an employee contracts the virus twice. However, this may not always be the answer under state law.

For example, the New York State Department of Health and New York State Department of Labor recently issued guidance providing that health care employees who test positive after a quarantine or isolation may receive paid sick leave for up to two additional periods of quarantine or isolation.

Employers could certainly opt to pay employees during a second quarantine, but they are not required to under the current federal law. Alternatively, employers could provide unpaid time off, if the employee has exhausted his or her paid time off.

An employer may also be obligated to consider leave as a reasonable accommodation for individuals whose disabilities put them at greater risk from COVID-19, unless such an accommodation would cause an undue hardship on the employer.

So that ends the inquiry, right? Again: wrong.

What’s an employer to do?

We are always wary of simple answers to tricky questions. One answer to the questions posed above is deceptively simple: If an employee has exhausted her 80 hours of FFCRA leave, it is exhausted, and she is not entitled to a second round of leave.

While that position is straightforward and legally defensible, it misses a bigger context. If an employee is not entitled to additional leave but has contracted COVID-19 twice (or more), a sensible employer, or at least, one that is interested in avoiding getting sued by other employees, will not allow the sick employee to return to work. But if an employer takes the position that an employee ordered to stay home is not entitled to pay, it opens up a whole other can of worms.

One policy arguably underlying the pay protection provisions of the FFCRA is to encourage candor: Employees will be less likely to ignore or minimize their own symptoms, and to tell their employers about what is going on, if they are not concerned about losing compensation as a reward for their honesty.

And with federal unemployment benefits of $600 per week in addition to the normal level of benefits still in place, an employee may well consider continuing to stay home or eventually finding another job.

These concerns underscore why many larger employers who are not subject to the FFCRA’s coverage because of their size have gratuitously offered pay protection to sick employees: You want to know that employees are sick, tell them to stay home to avoid community spread in the workplace, and — perhaps most importantly to your longer-term business goals — actually retain a workforce you hope can return soon enough in full force.

Obviously, employers must first and foremost ensure compliance with applicable law, including the FFCRA. But navigating the pandemic is not just a question of strict compliance. Arguably, protecting continuity of operations, the health of the workforce and an employer’s long-term investment in its workforce is at least as important as ensuring any shorter-term compliance.

While this article cannot address how a specific employer will weigh those potentially competing concerns, smart employers consider all of those impacts in deciding whether or not to maintain a leave policy that may exceed, not just meet, the requirements of the FFCRA.

Regardless of whether the U.S. is in the first or second wave, the possibility is now evident that employees may get the coronavirus for a second time, while having already exhausted the leave entitlements under the FFCRA, state leave laws and the employer’s PTO policy. Employers should be prepared to face this new obstacle, particularly as cases in the U.S. are not abating.


Mark A. Konkel is a partner and co-chair of the labor and employment practice group at Kelley Drye & Warren LLP.

Maria B. Biaggi is an associate at the firm.

Nicholas J. Kromka is an associate at the firm.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

The NCCI, Presumption and COVID19

The National Council of Compensation Insurance (“NCCI”) continues to further refine its cost estimates of COVID19 for the 38 states that it oversees for the purposes of rate and rule making for workers’ compensation.  The most notable states not included in this study are California, New York and New Jersey which collectively make up about 40% of the workers’ compensation premiums countrywide.

The term “presumption of compensability” speaks to whether a COVID19 case is deemed compensable solely by the nature of the afflicted’s joe duties, scope and where work is performed.  This is different in every state with new bills and laws being drafted and legislated every day.

The preemption legislation generally falls into three buckets:

  • Bills that establish compensability presumptions for first responders (fire, police, ambulance) and/or certain healthcare workers (nursing homes, hospitals, home health etc)
  • Bills that establish compensability presumptions for essential or frontline workers.  This expands presumption into most all client-facing roles still necessary (grocery, pharmacist, mass transit, TSA, meat-packing, banking etc.)
  • Bills that establish compensability presumptions for all employees in the state

Needless to say, understanding the expected costs to the workers’ compensation system of any given state and the appropriate risk load to charge as a result starts with who will and will not “automatically” be covered and thus drive cost.  As you will note below, there is a lot of activity in regard to this issue across the country.

You can access NCCI’s state-by-state compensability tracker here.

Additionally, the NCCI has built a free on-line COVID19 “Hypothetical Scenarios Tool” that really gets into the granular on expectation of costs by type of worker and symptom group as well as the expected risk load as a result thereof.  Here is where the NCCI’s middle of the road projection is as of their last study in April with the assumptions of all NCCI states and the total workforce presumed to have contracted COVID19 in an occupational setting.  The scenario assumptions with slide bars below can be adjusted manually, but these are the “middle ion the road” defaults.


Note in this scenario of the total workplace presumed to being exposed to COVID19 in all NCCI states, the expected additional risk load is +85%.

Where I found this model to be even more interesting is on a state by state basis.  Using same “total workforce” but now selecting just Florida.

A 69% v 85% risk load and a fatality claim average being $121,118 v $341,111.  Fatalities the most important risk and cost driver with “critical claims” coming in #2.  Now if we do the same for Texas…

The risk load almost triples the national average at 236% fueled by the cost of a fatality more than double the national average, or $723,912.

This is a very powerful tool that shows all of the variables in play in the forecasting of expected costs in NCCI states due to COVID19.  As this continues to be refined we will update you.

Have a great weekend and stay safe.

Commercial Lines Prices Rose +6% During Q1

According to a survey conducted by Willis Towers Watson, Property and Casualty premiums increased by over 6% in aggregate during Q1 which marks the 2nd quarter in a row for such an increase.   As has been the trend for years, Workers’ Compensation was the only line to experience consistent rate reductions during the same time period. However, many presume there is a hard market ahead for comp as well. Time will tell.

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U.S. commercial insurance prices climbed more than 6 percent in aggregate during the 2020 first quarter compared to the year, Willis Towers Watson’s pricing survey for the sector.

Price increases surpassed 6 percent in aggregate for the second quarter in a row, Willis Towers Watson said.

Once again, nearly all commercial lines saw price hikes. Some saw double-digit increases: Directors and Officers liability, excess/umbrella, commercial auto and property.

For most other lines, however, Willis Towers Watson said price changes trended higher at a similar rate to the previous quarter.

Price increases were more muted for small commercial accounts and higher across mid-market accounts, with large accounts nearing double digits, Willis Towers Watson said.

Workers’ compensation continued to be a notable exception with many carriers reporting rate reductions, Alejandra Nolibos, senior director, Insurance Consulting and Technology for Willis Towers Watson, said in prepared remarks.

As well, Nolibos said that the statistics don’t yet reflect reactions to short and midterm impacts of COVID-19, “among them changes in task and employment mix and the economic situation.” He said that continued analysis of emerging data will track those effects for future premium trends.

Willis Towers Watson’s CLIPS survey is a retrospective look at historical changes in commercial property/casualty insurance (P&C) prices and claim cost inflation.

Source: Willis Towers Watson

https://www.insurancejournal.com/news/national/2020/06/09/571470.htm

 

The NCCI Speaks to the Impact of COVID19 on Workers’ Compensation

Following suit with the research brief from WCIRB. Click here to access.

…done last week by the Workers’ Compensation Insurance Rating Bureau of California (“WCIRB”) on the impact of COVID19 on the California Workers’ Compensation system, the National Council of Compensation Insurance (“NCCI”) came out yesterday with the same for the 38 States that it tracks for rule and rate-making purposes. Note the numbers below do not include half the country’s volume of workers’ compensation premiums when it is considered States like California (25% on its own), New York and Ohio are not included in the below data.

Key findings of the NCCI on frequency rates:

  • % of ee’s that will contract COVID 19 on the job – <10% – 81%
    • it should be noted that the issue of “Presumption of Coverage” related to different types of occupations is the driver of the huge range in frequency – all States are presuming “First Responders” (1,176,110 workers), others to include Healthcare Workers and First Responders (9,666,420 workers) and still others such as Illinois that presumes any worker that is client facing has occupational exposure to the disease (86,351,950 total workers in the 38 States considered)
  • Infection rate is 5-50% regardless of class of worker above
  • Range of Impact of CoVid losses on overall expected losses by category of worker:
    • First Responders – PreCoVid expected losses of $1.1B with potential impact of $.1B – $1.9B… 10%-170% range
    • First Responders and Healthcare Workers – Pre CoVid losses of $3B  with potential impact of $1B – $16.2B…. 33% – 550% range
    • All Workers – PreCovid losses of $32.1B with potential impact of $2.78B – $81.5B… 8 – 254% range
    • Hospitalization rate after infection range is 1 – 31%
    • Critical care rate of 5 – 27%
    • Duration of care for mild symptoms of 2 weeks and 3 – 6 for moderate or critical cases
    • Cost per claim type:
      • Mild $1,000
      • Moderate-Severe $25,500
      • Severe $59,000
    • Impact by infection and compensability rates
      • 1% occupationally impacted, cost of loss goes up 8%
      • 5% = 42%
      • 10% = 85% – which at present is NCCI’s selection
    • Fatality rate for those infected with the virus is .5% across all classes of employees – Average impact $146,980 in death benefits (does not include medical)

My summation of what the NCCI and WCIRB are projecting is as followed:

  • The huge range in expected costs is going to be understood on a State by State basis with the issue of presumption of contraction based on occupational duties being the biggest driver
  • As each State has unique payouts for disability and death, the prediction of cost and risk load for pricing needs to be State by State
  • The healthcare segment is providing the most unpredictability – add a risk load, park the business elsewhere or stay out of the segment for now – too unpredictable
  • PEO’s can be a very important partner to insurance carriers by allowing them to understand performance data fastest due to their management of payroll
  • The smartest people I know do not know what to predict but this is a start – we probably will not have enough real data to narrow this range of expectations for months

Stay safe and we will get through this – but with our eyes open.

WCIRB Releases Cost Evaluation of Conclusive COVID-19 Presumption

See below from the WCIRB regarding the projected cost of COVID-19 claims to be filed by ‘Essential Critical Infrastructure Workers’….At the low end, if only 4.8% of California ECI workers file claims related to COVID-19, the cost to the system will be an astounding $2.2B!

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WCIRB Releases Cost Evaluation of Conclusive COVID-19 Presumption

Oakland CA, April 20, 2020 – The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) released its Cost Evaluation of Potential Conclusive COVID-19 Presumption in California Workers’ Compensation. The evaluation was completed in response to an April 8, 2020 request from the California State Assembly Insurance Committee to assess the impact of a conclusive presumption that COVID-19 claims arising from certain front line workers are presumed to be work-related. Specifically, the WCIRB was requested to provide the cost impact of a conclusive COVID-19 presumption for health care workers, firefighters, EMS and rescue employees, front line law enforcement officers and other essential critical infrastructure (ECI) employees.

The WCIRB estimates that the annual cost of COVID-19 claims on ECI workers under a conclusive presumption ranges from $2.2 billion to $33.6 billion with an approximate mid-range estimate of $11.2 billion, or 61 percent of the annual estimated cost of the total workers’ compensation system prior to the impact of the pandemic. The WCIRB noted that in developing this estimate it did not include a provision for non-ECI workers who may file a compensable workers’ compensation COVID-19 claim, nor did it adjust for the COVID-19 claims of ECI workers that may be compensable in the absence of a conclusive presumption.

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This and other important workers’ compensation topics will be discussed tomorrow during part 2 of NAPEO’s Coronavirus Updates webinar where our very own, Paul Hughes, will share his thoughts.  Click here for registration details.

 

California Workers’ Compensation Written Premium Continues to Decrease in 2019

Source: Insurance Journal

Premium decreases in California workers’ compensation may have escalated in 2019, a new report shows.

The Workers’ Compensation Insurance Rating Bureau of California on Wednesday released its quarterly experience report, an update on California statewide insurer experience valued as of Sept. 30.

The report shows decreases in written premium since 2016 are primarily driven by decreases in insurer charged rates more than offsetting increases in employer payroll.

Written premium for 2018 was 4% below that for 2017 and 6% below that for 2016, according to the WCIRB report.

Highlights of the WCIRB report include:

  • California written premium through the third calendar quarter of 2019 is 7 percent below the same period for 2018, suggesting that premium decreases are escalating in 2019.
  • The average charged rate for the first nine months of 2019 is 11 percent below that for 2018 and 32 percent below the peak in 2014.
  • The WCIRB projects the ultimate accident year loss ratio for 2018 to be three points above that for accident year 2017, driven by higher claim severities for 2018 and lower premium rates.

The full report is available in the research section of the WCIRB website.

California Rating Beaurau looks to Lower Rating Thresholds, Classification Changes & More

Please see the attached article about the proposed workers compensation rule changes in California.

https://www.wcexec.com/flash-report/compline-to-provide-2020-x-mods-daily-plus-lower-rating-thresholds-classification-changes-more/

Since 1982 Compline has proven to be a reliable, responsible and reasonable resource in California.  Their ongoing responsiveness to legislative changes in the state speaks to their continuing value.  Libertate is a proud subscriber to Compline.  We access and utilize their portal for a number of great resources, such as Modwatch, Lead Generation, Pure Premium Behavior Metrics, Strategic Rate Comparisons, Carrier XMOD Comparisons , Carrier Territory Rate Mapper and much more.

We will continue to keep our eye on the changes occurring in this state and are committed to keep you informed.

If you feel your PEO could benefit from an analytical analysis, in CA or elsewhere, please don’t hesitate to reach me at 321-436-8214.