The COVID-19 pandemic has completely changed the rules for entrepreneurs. With so many people without work or away from home, companies are facing a whole new set of uncertainties.
One of the biggest is how this pandemic will affect workers 'compensation systems, and employers are naturally worried about how it will affect their workers' compensation programs and premiums.
As with most other aspects of the pandemic, the impact on workers' comps is still a moving target.
The pandemic has thrown a huge element of uncertainty into workers' comp systems, and there are more questions than answers right now.
To the uncertainties that are added are the potentially catastrophic costs. Employers have never before been held liable for such things as an employee who contracted a cold or flu from an employee or customer because it is virtually impossible to prove where the employee actually contracted it. But COVID-driven legislation in many states is starting to change that. The New York Compensation Insurance Rating Board conducted a legislative analysis of the potential cost effects of assessing COVID-19 virus exposure as an occupational disease and estimated the price tag at more than $ 31 billion.
The potential effect for employers is a mixed bag. Overall, the workers' compensation frequency may fall during the pandemic with fewer people working. On the other hand, investment income, which is such an important part of the pricing of workers' carriers, has fallen sharply, allowing carriers to raise premiums to recoup some of these losses.
How will COVID-19 affect WC prices?  Again, it's still too early to tell. The National Board of Compensation Insurance (NCCI) reports that their loss cost / tax returns for this year will be based on premium and loss data prior to COVID-19, and will not contain any adjustments for the effects of the pandemic. But when the pandemic develops, prices can be affected by future events.
Four steps you can take now
Although the ultimate effect of the COVID-19 pandemic on workers' compensation remains a huge unknown, it does not mean you should sit idle and wait to see what happens . Here are four proactive measures you can take to better manage damages and keep costs and premiums down.
- Develop a plan with your insurance partner to handle any increases in receivables. With uncertainty about the compensability for COVID-19 exposure in the workplace and the risk of more fraudulent claims, all claims must be carefully examined. Receivables should be proactive and claims reserves should be closely monitored.
- Use telemedicine . Already an increasingly popular treatment option, it has become a way of living under social distance guidelines. Coordinate with your injury counselors to determine when and how to best use telemedicine for injured workers.
- Communicate regularly with injured employees . Now more than ever, injured workers are outreach crucial. Navigating the workers' compensation process is already stressful for injured employees, and the uncertainties that the pandemic brings only reinforce their concerns. Focus on communication, education and openness to drive better demands on results and lower costs.
- Do Not Affect Preventive Education and Training . During this hectic time, safety and injury prevention training can easily slip through the cracks. Make sure all employees understand the correct way to perform their tasks, avoid dangers and minimize physical and mental stress.
Do you need help navigating your workers' compensation programs through this pandemic? Call risk manager at BNC Agency today.