Insurers Expected COVID-19 Workers' Comp Surge; It Never Came

Insurers Expected COVID-19 Workers’ Comp Surge; It Never Came

COVID-19 workers’ compensation claims have not been as widespread as insurers and ratings agencies around the country had predicted when the pandemic first started in early 2020.

Also, a large chunk of COVID-19 workers’ compensation claims filed by workers nationwide have been rejected, with insurers often citing lack of proof that the illness was contracted in the workplace.

The insurance industry was bracing for a deluge of workers’ comp claims when the seriousness of the pandemic became evident. This was especially true more as states passed laws requiring that essential workers be eligible for workers’ compensation benefits if they contracted the coronavirus. The laws introduced the presumption that if an essential worker came down with the disease, they had contracted it on the job.

Hundreds of thousands of COVID-19 claims were filed by workers around the country last year, but insurers were never overwhelmed. That’s because the number of other, more typical workers’ compensation claims tumbled dramatically as more employees were asked to work from home, while others were laid off in droves as plants shut down or business slowed.

With fewer people working on-site, the number of other workplace injuries and illnesses dwindled, experts say.

In the nine months ended Sept. 30, workers’ compensation payments and liabilities fell 7.6% from the same period of 2019, according to the National Council on Compensation Insurance (NCCI), which is the rate-making agency in more than 30 states.

Rejected claims

As mentioned, a significant percentage of COVID-19 workers’ compensation claims have been rejected. For example:

  • In California, which has a law that extends the presumption that a case was contracted at work for anybody working on-site, 26% of the 93,470 COVID-19 claims filed in 2020 were denied.
  • In Texas, which has no presumption for COVID-19, 45% of the 32,000 related workers’ comp claims were denied, despite those workers testing positive.
  • In Florida, which has given front-line workers who are state employees a presumption of eligibility, 22% of state employees’ coronavirus-related workers’ comp claims were denied last year, compared to 56% of cases for workers in the private sector. The NCCI also noted that fewer than 2% of COVID-19 workers’ compensation claims cost more than $10,000.

Payouts lower than expected

Another factor is that even COVID-19 claims that were accepted, often did not end up costing the insurers as much as they expected to pay out because the majority of sick workers did not require any hospital stays or treatment. The percentage of workers requiring treatment was smaller than expected.

Insurers also say that many claims were likely never reported in the first place, particularly when workers had mild or no symptoms.

That’s backed by the NCCI, which recently issued a report showing that:

  • 20% of COVID‐19 medical claims had an inpatient stay.
  • Of those claimants with an inpatient stay, 19% were in an ICU for some portion of their time in hospital.
  • The average length of inpatient stays for COVID‐19 medical claims was 7.5 days.
  • The average cost per day was $5,400, totaling on average $38,500 per inpatient stay.
  • COVID‐19 medical claims requiring an ICU visit tended to incur longer and more expensive inpatient stays, at 11.5 days and $67,300 per inpatient stay, respectively.

BGES Group’s office, located in Larchmont, NY is a full service insurance agency offering, Property, Liability, Umbrella Liability, Business Auto, Bid & Performance Bonds, Inland Marine, Worker’s Compensation, New York State Disability, Group Health, Life insurance, Personal lines and Identity Theft.

Special Contractor Insurance Programs (NY, NJ, CT) – We we have 50+ insurance companies to market your general liability, umbrella liability, business auto, workers compensation, bid & performance bonds and group health coverages.  We help contractors set up proper risk transfer.  If you’re a contractor we offer extensive information about insurance markets, coverages, risk transfer, subcontractor screening, ways to lower your insurance costs.

BGES Group are Worker’s Compensation Specialists for the States of New York, New Jersey and Connecticut – Issues we address: 1) Lowering pricing – we have specialty programs that can save you up to 40%; 2) Finding a new company; 3) Replacing policies that are being cancelled or non renewed; 4) Audit disputes; 5) Company creating fictitious payroll at audit time; 6) Lowering high experience modifications factors; 7) Misclassification of payrolls; 8) Lowering or eliminating renewal deposits;   9) Getting coverage when you’ve been without for a few months; 10) Covering multiple states under one policy; 11) Eliminating 10% service or policy fees; 12) Timely issuance of certificates; 13) Always being able to get someone on the phone or by email when you need to.

If you would like to speak with us call Gary Wallach at 914-806-5853 or click here to email or click here to visit our website.

Company: BGES Group, 216A Larchmont Acres West, Larchmont, NY 10538



© – Copyright – 2021 – BGES Group

Posted in Uncategorized.

Leave a Reply

Your email address will not be published. Required fields are marked *