Worker’s comp recovery in a COVID-19 world? It depends!
Self-funded benefit plan sponsors and insurers must grapple with an important question: who pays for all this unexpected health care?
COVID-19; is it real, exaggerated, or an outright hoax perpetuated by the Left to delegitimize the current administration heading into the 2020 election? Regardless of which you believe, it is unquestionable that the virus has had a profound impact on every single American. In addition to the health crisis itself, many have lost loved ones without the ability for a proper goodbye.
More have had to engage in the difficult task of being both parent and teacher while also trying to ensure the financial viability of their families. For a very significant amount of people, this health crisis has turned into a financial crisis causing reduction in compensation and benefits, furloughs, and for millions, unemployment – many left to wonder if their dreams of owning a business, and their entire life savings, were shattered when the virus took hold.
Related: How COVID-19 has affected different generations financially
For those employers who have been fortunate enough to find a way to weather the financial storm, the reality is not lost that the impact of the virus will be with us long after viable treatments, or even a vaccine, have been developed. Self-funded benefit plan sponsors and insurers must now grapple with another very important question; who pays for all this unexpected health care? The answer in many, perhaps even most situations, is those same self-funded benefit plans and health insurers. In some instances, though, there may be opportunities for benefit plans to defray some of the costs.
Some legal scholars have posited that due to the reportedly rampant infectiousness of the virus, arguments could be made that someone who knowingly comes into close contact with it, and then fails to comply with guidance from medical health professionals regarding social distancing and quarantine periods thereby putting others at risk, could even possibly be held criminally and/or civilly liable for battery.
To the trained eye it is quite easy to see the rationale for the viability of such claims, while simultaneously seeing the potential fatal flaw. While it can be considered quite unreasonable to knowingly ignore the guidance of health officials and put others at risk, it would be virtually impossible to prove that a specific, likely asymptomatic person, ultimately infected another specific person.
While this notion of liability for battery may be a bit esoteric in this context, and certainly not all that helpful for benefit plans that are unlikely to see many such cases, let alone a viable fund from which to pursue a recovery, some benefit plans are very likely to encounter people who contracted the virus at work, where many Americans are at a significantly higher risk of contracting this virus.
Take a nurse, for example. A nurse assigned to a COVID unit is much more likely to contract the virus than, say, a manager at a grocery store. Yet, both may be considered Essential Employees and by the very nature of their employment, contract the virus while working. Even the COVID nurse, though, could easily contract the virus at the grocery store on the way home from her shift. Therein lies the very tangible concept that makes successful recovery difficult; how do you prove causation – the most important element of any civil claim against a possible responsible party? How does one prove that the nurse contracted the virus while treating her patient rather than getting too close to another person during a walk and breathing in that person’s droplets?
The answer, as is so often the case with legal matters is: “it depends!”
It depends because every state treats the key legal concept differently, that of “Presumptive Illness.” This presumption, often used for firefighters who contract certain lung diseases that were likely caused by their time on the job, allows those trying to obtain benefits to get over the very difficult hump of Causation created when the possibility of contracting a disease is made much more likely by ones circumstances. Applied to a COVID example, the nurse assigned to a COVID unit would be presumed to have contracted the virus at work; it would then be the burden of the worker’s compensation carrier to prove otherwise. Accordingly, the notion of Causation becomes a significantly lesser barrier to benefits.
That is not the end of the analysis, though. While clearly a reasonable presumption to apply to a nurse, what about that grocery store manager? Or a cashier at the grocery store? If they were practicing all other safety measures, it stands to reason that they more likely than not contracted the virus while being closely subjected to hundreds of people a day within the course and scope of their employment. The level to which any Essential Employee may be able to prove that they contracted the disease at work and therefore be eligible for benefits relies on the status of this presumption in every state.
The analysis that must be done in every single state is as follows:
- Does the state in question grant a presumption?
- Is the presumption defined broadly enough to cover a COVID-19 claim?
- To what class of employees is the presumption extended (e.g. medical personnel only or all Essential Employees).
- How does that particular state define an Essential Employee?
- Is there any action or proposed action to amend or extend any of the above?
All entities providing or administering health benefit plans in America should be evaluating this and preparing for what is likely to be an onslaught of medical bills resulting from this pandemic for which they did not budget. Just last week there was a story about a man who was heralded by hospital staff lining the halls as he victoriously marched home after his long battle with this virus, only to be met upon his arrival at home with a thankful family … and $1 million in medical bills!
The potential cost to health benefit plans as a result of this virus will no doubt be significant. In addition to the expensive treatment required, it remains to be seen what may happen to hospitals’ chargemasters after reporting months of record losses thanks to the shutdown of many of their services, such as elective surgeries. As they attempt to recoup some of those profits, are they not likely to institute what some have been calling a “COVID surcharge,” something many businesses are being forced to do, either as an itemized line item, or baked in as higher charges on other services across the board.
It is incumbent on benefit plans to work with their counselors and advisors to plan for this and try to contain some of these costs wherever possible. Third-party recovery, as well as other strategies, may be available; with the medical bills likely already trickling in, time is of the essence! Remember, where every benefit plan and employer are different; what then is the best way to plan for and contain these costs? Well … it depends!ap
Christopher M. Aguiar, Esq. is a health benefits lawyer and third party liability attorney who started his career as a Claims Recovery Specialist with The Phia Group in 2005 and spent the first couple of years honing his subrogation, third party recovery and negotiation skills while also learning about the incredibly complex field of subrogation and benefit plan recovery law.
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