As Colorado businesses reopen, coronavirus-related workers’ compensation claims are piling up

As restaurants reopen and people return to their offices, more than 1,400 Colorado workers have already filed compensation claims for being infected by or exposed to the novel coronavirus while on the job. 

The workers’ compensation system is the only way that people who fall ill due to their work can receive payment for that hardship. But, in a system that generally places the burden on workers to prove their illness is job-related and was not contracted elsewhere, the majority of claims filed have so far not been successful. And experts say the easing of social-distancing orders will make it more difficult for workers to win new compensation cases for COVID-19, the disease caused by the coronavirus.

Even if the claims do get approved, a wrinkle in the law means that companies with poor safety records can use workers’ compensation to make themselves immune from bigger — and, potentially, costlier — liability lawsuits by their employees.

The situation has some advocates eager to make changes to the law during the state legislative session that restarted on Tuesday. They argue that workers need to be protected in their jobs for the economy to rev back up fully.

“This is critical to re-opening these states and opening up the economy,” said Kim Cordova, the president of UFCW Local 7, the state’s largest labor union.

But any attempt to change the status quo in workers’ comp will likely kick off a huge fight, drawing opposition from businesses and insurance companies that worry they could be facing millions of dollars in claims during an already brutal economic environment.

“Worker’s compensation is always an area that is in tension,” said Paul Tauriello, the director of Colorado’s Division of Workers’ Compensation. “There’s never anything you can do that everybody loves. It’s always a balance.”

Comp and COVID

In theory, a coronavirus infection is just like any other occupational injury or illness. If it results from your work, you are entitled to payment for your medical bills and time missed at work beyond three days. Claims could range from something as mild as a missed-time claim for a mandatory quarantine period following an exposure all the way up to a death claim for a worker who died from work-contracted coronavirus.

But, because workers’ compensation for coronavirus is such a new area, it’s still uncertain how all of this will work in practice.

According to the state Health Department’s latest report on coronavirus outbreaks, more than 3,400 workers at nursing homes, grocery stores, food-processing plants and prisons have come down with confirmed or suspected cases of COVID-19 tied to an outbreak. According to the report, 21 have died — a number that doesn’t include the death of a second worker at a Denver King Soopers that was reported Monday.

As of Tuesday, though, Tauriello said the state had received 1,425 workers’ comp claims mentioning COVID-19. Because that number is based on essentially a keyword search of the state’s workers’ comp system, it’s possible that a handful of those don’t involve claims of coronavirus infections or exposures picked up at work. But Tauriello expects that the vast majority do.

Pinnacol Assurance, the state’s largest workers’ comp insurer, said last week that it has received about 1,000 coronavirus-related claims. But it said the majority of those — 60% — were filed out of an abundance of caution and were dismissed after it was later determined that the worker did not contract COVID-19.

Of the roughly 400 claims remaining, Pinnacol said it has agreed to pay out on the majority of them, with the average claim amount running around $13,000. Early on in the pandemic, Pinnacol said it would cover any COVID-19 testing costs and two weeks’ worth of wage replacement for sick or quarantined first responders or health care workers. The majority of Pinnacol’s claims so far have come from those two sectors.

A tough standard

It’s unclear how workers in other fields are being treated.

Of the claims received by the state, Tauriello said about 60% have been denied by employers — meaning workers will have to continue fighting for benefits through the workers’ comp litigation process. About 27% have been “admitted” by employers, meaning they will pay out benefits. The remainder are still being processed and investigated.

The claims submitted so far include six for worker deaths. Tauriello said one of those death claims has been admitted by the employer, and the remaining five are still being investigated.

Tauriello did not provide a breakdown of the claims by industry, and workers’ comp cases are not public record under state law, making additional information difficult to come by.

Anecdotally, labor leaders and workers’ comp attorneys said they have heard about companies fighting coronavirus claims on the grounds that workers can’t prove they contracted the virus on the job.  And that is what makes a workers’ comp claim for COVID-19 so tricky, especially going forward. Currently, workers have to prove it is more likely than not that they contracted COVID-19 at work.

In the early days of the pandemic, that might not have been so hard to do. Tauriello gave the example of a health care worker involved in treating coronavirus patients who then became sick. During a period where there was relatively little spread of the virus in the community, it would be much easier to show that the infection came from work.

But now that the virus is circulating widely and people are beginning to move around more?

“It just gets murkier and murkier as time goes by,” Tauriello said.

Mark Elliott, the president of the Workers’ Compensation Education Association, an organization of workers’ comp attorneys in Colorado, said workers may need to point to evidence of coronavirus spread within their workplace or exposure to a documented case of COVID-19. Ultimately, the matter will be decided by a workers’ comp judge and could take months or years to conclude.

“We’re trying to avoid years of litigation,” said Elliott, who is, himself, a workers’ comp attorney. “And we’re trying to get to a place where these obvious claims should be admitted and paid.”

A “presumption” for some workers

There is a way to make it easier for workers to claim workers’ comp benefits for COVID-19, and it’s one that lawmakers are expected to debate during the newly restarted session. The idea is to create a presumption that coronavirus infections are always work-related for workers in certain industries, unless companies can clearly show otherwise.

This type of presumption has existed for years when it comes to firefighters and certain types of cancer. State Sen. Robert Rodriguez’s proposed bill would extend a presumption regarding COVID-19 to first responders and workers in the health care, food-processing and possibly grocery industries. The exact list is still a work in progress, but Rodriguez said the goal is for the presumption to cover people who work at “places that had to stay open. The ones that don’t have the option of not staying open.”

“We’re trying to make sure there’s a little peace of mind” for workers, Rodriguez, D-Denver, said.

But employers are wary of how much money this presumption will cost them, said Elliott, who has been involved in drafting the bill. And workers’ comp insurers warn of large increases in insurance costs.

Edie Sonn, a spokeswoman for Pinnacol, said the company projects a 27% increase in workers’ comp insurance premiums for employers if the presumption applies to the state’s full list of essential workers. If the presumption applies just to first responders and frontline health care workers, she said premiums would triple for those industries.

Sonn said Pinnacol has proposed creating a fund on the national level that coronavirus-affected essential workers could tap into, something like what has been proposed in the HEROES Act that Democrats in the U.S. House of Representatives passed this month.

“We actually think that makes more sense than trying to shoehorn this into the workers’ comp system,” Sonn said.

The “grand bargain”

But workers’ comp provides employers with a significant benefit — it protects them from much more costly lawsuits, even when they behave badly.

Talk to enough people about workers’ comp, and you will hear time and again about the system’s “grand bargain.” The bargain is the mix of interconnected tradeoffs that keeps workers’ comp from being a system that anybody really loves.

“It’s not great benefits,” Elliott said of workers’ comp. “But the whole purpose is that they be delivered quickly without the need for litigation.”

“It’s not like hitting the lottery,” he added.

But, in exchange for getting their benefits fast, workers lose the ability to sue their employers for accidents and illnesses that are the employers’ fault.

This is called the law’s “exclusive remedy” provision. It means workers’ comp is the only way to collect payment for an on-the-job injury or illness, and it means employers rarely face punitive damages for maintaining an unsafe workplace. Workers’ comp benefits are capped. And workers who do try to sue in civil court can have their cases thrown out with an order that they pay their employer’s legal costs.

So, as talk grows nationally about granting certain industries immunity from civil lawsuits over coronavirus, the workers’ comp system already grants that immunity — making it something that labor leaders fear companies will abuse.

“In some cases, there’s no incentive to provide a safe work space because their liability is limited in this because it just moves over to comp,” UFCW’s Cordova said.

Finding a new normal

There is one lever that’s intended to keep employers in line: Companies with bad safety records pay higher workers’ comp insurance premiums. But that may not be true with coronavirus.

The National Council on Compensation Insurance, the group that sets the rules for how workers’ comp premiums are calculated, has proposed excluding coronavirus claims from future rate calculation, at least for the time being. This means companies that do little to control the spread of COVID-19 among their workers may not have to pay more in the long term.

Ultimately, Tauriello said how the workers’ comp system handles COVID-19 will eventually become much clearer. Patterns will emerge from workers’ comp judge’s orders. Employers, workers and insurance companies will adjust accordingly. A new balance will be reached — just not soon.

“It’s still too early,” he said. “We don’t know where this is going.”