Will Workers’ Compensation Insurance Cover Coronavirus?

Workers who don’t work in health care may have difficult time claiming workers’ compensation

workers compensation coronavirus

Editor’s note: This article is for informational purposes and is not meant to provide legal, regulatory, accounting, or tax advice. This article was last updated March 2020. 

As the coronavirus continues to spread across the country, small and medium-sized businesses (SMBs) are looking at options to help employees impacted by the virus. 

While the CDC advises to stay home if you are sick, the financial strain of missing work may tempt employees to report to work. Business owners are wondering if their workers’ compensation policies are available to help employees’ to bridge the financial gap. 

Is coronavirus covered by workers’ compensation? 

The answer depends on how the employee contracted the disease, but in most cases exposure or contraction of the virus is not considered to be a work-related injury or condition. 

… in most cases exposure or contraction of the virus is not considered to be a work-related injury or condition.

Workers’ compensation insurance is meant to cover illness or injury “arising out of or in the course of employment.” 

If there was only a chance an employee was exposed to the coronavirus on the job, the claim would likely be denied. 

If exposure was a direct result of work, the claim should be approved. 

Some businesses have employees whose work is directly related to coronavirus — for example, testing labs, first responders, medical offices, and clinics. These organizations will need to keep meticulous protocols and records to minimize risk and identify potential exposure. Workers’ compensation would most likely cover any employee in these types of roles who contract the disease.

Other claims that meet certain criteria for exposure will be considered on a case-by-case basis.

Insurance may be guided by the state  

Insurance companies are already receiving a flood of claims from businesses, and may be outlining the terms of their policies in denying coverage. 

They may have support from the government. 

Washington state, one of the hardest hit regions in the U.S. with respect to the coronavirus, recently put out guidelines on the issue, writing: 

  • Under certain circumstances, claims from health care providers and first responders involving COVID-19 may be allowed. Other claims that meet certain criteria for exposure will be considered on a case-by-case basis.
  • In most cases, exposure and/or contraction of COVID-19 is not considered to be an allowable, work-related condition.

What type of support you need for a coronavirus claim

To file a claim under workers’ compensation, employees generally need to meet certain criteria. 

These include whether: 

  • There exists an increased occupational risk of contracting the disease/injury due to their role 
  • The employee could have contracted the disease/injury elsewhere
  • The employee can identify a specific point of contact or event that led to their contraction of the disease/injury

Establishing these could require meticulous, quantifiable records, which could be difficult since the incubation period for coronavirus can be anywhere between 2 to 14 days. 

Workers, and the business owners who assist them in filing a claim, are encouraged not to put through the paperwork unless they meet these listed thresholds. 

Short- and long-term disability 

Employees in 5 states — California, Hawaii, New Jersey, New York, and Rhode Island — are covered under mandatory short- and long-term disability laws

As of March 16, 2020, only California has indicated it will allow workers impacted by the coronavirus to use their disability benefits for the disease. 

Governor Gavin Newsom recently tweeted, “If a medical professional says you’re unable to work, if your hours have been reduced, or your employer has shut down — you can file a claim.”

Other states with mandatory disability insurance may follow suit, but few workers fall under their coverage. 

Unemployment insurance 

On March 12, 2020, the U.S. Department of Labor announced new guidance on the flexibility states have in administering unemployment insurance programs to minimize the impact of the coronavirus on American workers. 

The guidance allows states to amend their law to pay benefits if:

  • They temporarily cease operations due to the virus 
  • A worker is quarantined temporarily
  • If the employee is out of work due to the risk of exposure or infection or to care for a family member

States will need to notify the business community and their constituents whether they are implementing these federal recommendations. 

Coronavirus stories to help your small business

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