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Comp trends may not apply during the COVID downturn



The sudden loss of millions of jobs, health care restrictions without urgent illness, and potential workers' compensation claims from pandemic-related illness have experts who doubt whether claims will follow the conventional industry pattern of past declines.

Experts say they are on the lookout for greater frequency, a longer chain of claims due to limited medical services and increased cumulative trauma claims.

"Not all recessions are the same," said Len Herk, CEO and senior economist at the National Council on Compensation Insurance. "We may see some of the same themes as in previous recessions, but … the pandemic recession is really another animal."

During recession, employment and wage reductions usually lead to a decrease in workers' compensation premium and injuries fall below trends according to research from Boca Raton, Florida-based NCCI.

Economists for workers' compensation have a number of theories as to why the claim rate tends to dip during a recession, Herk said. One theory is that employers usually terminate their newest employees ̵

1; who are more likely to be injured than workers with longer periods of time – and when hired back they remain more susceptible to injuries, he said.

Another theory is that employers who fear that they may be laid off if they submit an employee compensation application will be less likely to do so.

However, there is limited evidence of how much each factor contributes to these recessions and the data is too cumulative to "clearly distinguish one theory from another," Herk said. "There are many good questions about fluctuations in employment and worker skills that remains to be carefully considered in research. "

In the economic downturn that was shut down by closures to limit the spread of COVID-19," all efforts are off, "said David Bellusci, executive director and chief actuary of the Workers Compensation Insurance Rating Bureau in Oakland, California.

"We went almost immediately from close to full employment to maybe unemployment as high as 25% in just four months," he said. "Even during the Great Depression (unemployment), it eventually went to 25% but it's been over four years. It's really outstanding, and exactly how it's going to affect (working comp), who knows? We've never seen anything like it. "[19659002] Nationally, the "relative size" of other factors will determine whether workers' remuneration behaves differently during this economic downturn, NCCI noted in a quarterly meeting in April.

Certain factors that may affect the comp system include whether injured employees who are temporarily laid off postpone reporting workplace injuries for fear of losing their jobs when resident residence orders are taken up, or whether workers who foresee a permanent job loss "speed up" their reporting of damage.

The improved unemployment insurance that lawmakers made available by lawmakers early in the pandemic can also affect filing reporting, as the federal unemployment benefit for many lower-paid workers is higher than full workers' compensation benefits and, in general, workers cannot compensate workers. benefits at the same time, according to NCCI.

While some claims are automatic – an employee needs immediate medical attention and an ambulance is called – minor injuries can be discretionary. And many factors can drive employee claims to behavior for a discretionary claim, Herk said, such as how a worker's specific industry has been affected during the downturn and whether the rest of a worker's household has been adversely financially affected by the recession. [19659002] The diversion of medical resources to fight coronaviruses can also have a negative impact on current comp claims, says Bill Zachry, San Carlos, California-based worker compensation consultant and board member of California's state compensation insurance fund.

"(COVID-19) may actually increase the cost of some of the claims by extending disability or delaying operations," he said, and the inability of some employers to bring back injured workers due to the scourge could increase exposure to temporary disability.

Unlike other recessions, there can also be an upward injury because workers do not perform their jobs in a typical way or in their typical environment, said David La Ngham, assistant superintendent of the Florida Office of Judges of Compensation Claims in Tallahassee

"Where I see the risk of major damage is with the environment at home," he said. "Security people say change is a major driver of claims. If you are used to working in an office … and now lay you in a position that works in a more crowded space, or another space, that change could very well lead to travel and falls and glides and that type. "

To so In spite of the majority of the states, in California, an executive presumption was created via executive order to allow workers to collect workers' compensation for COVID-19 infections that are believed to be work-related. These COVID-19 claims, combined with the state's historically higher level of claims for termination, are "two phenomena that can reduce the normal economic downturn in claims," ​​Bellusci said.

In a report released on Monday by WCIRB, the California Rating Agency speculated that COVID-19 claims could lead to an estimated 14% increase in injury rate over the four-month period that the presumption is in place.

Claims after termination is also a problem in California, which saw about 25 claims after termination from every 1,000 job losses in the state in 2011.

"If we even took half of that rate … and applied that on the 4 million plus Californians who have already lost their jobs (because of COVID-19), it would generate about 50,000 layoffs, which would hit the rate by 25%, "Bellusci said. The most common filed injuries were cumulative trauma, which is typically soft tissue injuries involving multiple body parts, according to the WCIRB report. 19 claims to his compass moods.

"Before COVID … it was one of the largest cost drivers in California," he said. number of CT claims. "

                    


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