How COVID Effect on Workers’ Compensation Claims Has Varied by State, Industry

How COVID Effect on Workers’ Compensation Claims Has Varied by State, Industry

2021-01-14 16:36:28
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The percentage of COVID-19 claims among all workers’ compensation paid claims has varied greatly among states and occupations, as has the decrease in non-COVID claims, new research shows.

The percentage of COVID-19 claims among all workers’ compensation paid claims ranged from 1 percent in Kansas and South Carolina to 34 percent in New Jersey and 42 percent in Massachusetts in the second quarter of 2020, according to research from the Workers Compensation Research Institute (WCRI).

WCRI also found that there has been a substantial concentration of COVID-19 claims among workers employed in service industries (85 percent in 2020 second quarter), particularly in assisted living facilities, hospitals, and the offices of physicians and dentists.

A number of factors may have contributed to the variation, including severity of the COVID-19 outbreak, presumption laws and compensability rules.

The WCRI study, The Early Impact of COVID-19 on Workers’ Compensation Claim Composition, looks at how the massive slowdown of economic activity early in the pandemic impacted workers’ compensation, and to what extent COVID-19 claims have arisen in the workers’ compensation system.

This study covers claims with injury dates in the first two quarters of 2019 and 2020 with payments made for either medical services or income benefits during the first two quarters of the respective years in 27 states. Researchers analyzed paid claims for private sector workers and local public employees.

Source: WCRI

“This report will shed some light on the early impact of the COVID-19 pandemic on workers’ compensation and help policymakers and stakeholders track changes in key dimensions of the effect of COVID-19 on workers’ compensation,” said John Ruser, president and CEO of WCRI.

As compared with the first quarter of 2019, WCRI observed decreases in the first quarter of 2020 in the number of non-COVID-19 claims across all states, ranging from a 2 percent decrease in Arkansas to a 20 percent decrease in Connecticut. Comparing the second quarters of both years, the reduction in the volume of non-COVID-19 workers’ compensation claims was even larger, dropping by at least 30 percent in the vast majority of the states and by as much as 50 percent in Massachusetts.

For lost-time claims with more than seven days away from work (including COVID-19 lost-time claims), the study found even greater variation in the changes of workers’ compensation claim volume, with some states reporting increases and some reporting decreases in the number of lost-time claims. For the second quarter, the change from 2019 to 2020 in the number of lost-time claims varied between a 27 percent decrease in Nevada and a 63 percent increase in Massachusetts.

Overall, there was tremendous variation in how the pandemic impacted different industries as a result of lockdowns, massive economic slowdown, and remote work. Comparing second quarter 20202 against the same period in 2019, the largest decrease in the number of non-COVID-19 workers’ compensation claims was 57 percent for clerical and professional employees. The smallest decrease was 25 percent for construction workers.

The 27 states studied represent 68 percent of the workers’ compensation benefits paid in the United States. They are are Arizona, Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin.

The authors of this study are Dr. Olesya Fomenko and Dr. John Ruser.

WCRI is an independent, not-for-profit research organization based in Cambridge, Mass.

The study: The Early Impact of COVID-19 on Workers’ Compensation Claim Composition

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