Before the COVID-19 liability bill passed on Aug. 13, its proponents reassured the public and fellow legislators that the bill’s tougher requirements to file pandemic-related lawsuits against businesses wouldn’t completely block sick workers from financial help.
The law doesn’t affect workers’ compensation insurance, they said, leaving it as the only apparent avenue for workers who contract COVID-19 on the job to seek compensation.
But critics argue that workers’ compensation is a system fraught with barriers to employees and more equipped to process claims of injuries than illnesses like COVID-19, leaving workers unlikely to receive the money they need to stay afloat while recovering.
“I’m worried that we’ve created a maze that people can’t escape, a flow chart that leads to failure in all directions,” Sen. Jeff Yarbro, D-Nashville, told The Tennessean.
“If workers are concerned that their workplace is unsafe, and want to stay home, the state refuses to provide unemployment. If the worker contacts TOSHA (a state agency that monitors workplace safety), the response is, that agency has no authority to regulate the spread of germs in the workplace,” Yarbro explained. “If they call the governor’s office about the Tennessee Pledge, the answer is, ‘it’s voluntary.’ If they try to file a lawsuit, they’re precluded and have to seek workers’ compensation, and if they seek workers’ compensation, they may still be out of luck depending on how the … policy is written.”
From March 1 through Aug. 16, Tennessee insurers approved 1,226 of the 2,081 total workers’ compensation claims associated with COVID-19 — just under 59%, according to state data.
As the pandemic’s impact unfurled, Tennessee programs meant to protect workers were largely unprepared to handle the scope of the economic and public health crises.
When hundreds of thousands of laid-off and furloughed Tennesseans applied for unemployment insurance, the state’s system crashed and later left thousands waiting weeks or months to receive benefits without income or job prospects. More than 500 complaints to TOSHA about employers’ alleged failure to follow COVID-19 safety protocols resulted in zero citations for alleged violations leading to employees contracting “work-related illness” — employers instead received letters reiterating voluntary state and federal guidelines.
With the exception of local orders in Tennessee’s metropolitan cities, there are no enforceable regulations to hold businesses accountable.
Though the state has taken steps to improve its unemployment system, state legislators have been hesitant to follow in the footsteps of other states and pass legislation mandating pandemic workplace safety standards or simplifying the workers’ compensation program for employees who contract COVID-19, fearing such measures would harm Tennessee’s already struggling businesses.
Mary-Kathryn Harcombe, legal director of the TN Immigrant & Refugee Rights Coalition, worries that the lack of options is instead leading to suffering for Tennessee’s workers, who could lose income, their jobs, or their health insurance if they get sick.
‘We’re not going through any of those doors’
Workers’ compensation insurance provides payments to employees who are injured or fall ill on the job to help cover the costs of medical care, rehabilitation, lost wages during recovery and in some cases, long-term compensation.
In Tennessee, businesses with five or more employees (or one employee for construction companies) are required to have workers’ compensation insurance, unless they meet exemptions.
COVID-19 posed challenges to several states’ workers’ compensation programs, some of which do not cover “ordinary diseases of life,” like the flu. Tennessee is among the states that list “occupational diseases” as potentially covered injuries if they meet certain criteria, though eligibility is determined based on medical proof on a case-by-case basis in the Court of Workers’ Compensation Claims. The burden is on the employee to prove that their job contributed more than 50% to the injury or illness, considering all other possible causes.
Contract tracing evidence does suggest that workplaces are major sites of exposure for COVID-19 cases. In Nashville, 21% of cases from Aug. 6 to Aug. 14 were traced back to workplaces, second only to household transmission at 26.5%. Workplaces have been a top site of exposure in Nashville for several weeks, health department data shows.
Harcombe is quick to point out that people who are exposed to the virus at work are also likely to bring it home to their families.
“There’s no clear way to show that COVID-19 is an occupational disease,” she said, and workers typically do not have access to lawyers that can help them make their claim.
At least 17 states have attempted to ease this burden on workers by issuing orders or laws to expand and clarify coverage of COVID-19, and several more have considered similar actions.
Arkansas classified COVID-19 as an occupational disease, removing one hurdle for sick employees.
Kentucky Gov. Andy Beshear issued an executive order stating several categories of front line employees (including grocery workers and first responders, among others) are entitled to temporary disability payments during their quarantine period, provided that the worker can show they were exposed to COVID-19 at work and they were removed by a physician’s orders.
At least 12 other states have issued similar rules, and all federal employees who interact closely with the public and develop COVID-19 are entitled to workers’ compensation under the Federal Employees Compensation Act.
Yarbro proposed a bill on Aug. 11 that would make clear that COVID-19 is an occupational disease in Tennessee and shift the burden of proof that the illness came from outside of the workplace to the employer if a workplace suffered an outbreak (defined as 10% of workers testing positive over a 60-day period for large companies, or at least 10 people testing positive for smaller businesses).
The bill died in the Senate Commerce and Labor Committee, voted down 7-1.
“I don’t particularly care which way it’s addressed,” Yarbro said of the bill’s defeat. “I think that you could do this through an executive order just requiring businesses to adopt minimal safety standards. You could also do it through providing TOSHA with rule-making authority and the ability to investigate workplaces that are not adhering to basic, common-sense standards. But we’re not going through any of those doors.”
He said he believes most businesses want to do the right thing, but systems do not usually depend on everyone choosing that path.
“We’re asking people to, in some cases, undertake expensive precautionary measures out of the goodness of their heart,” Yarbro said.
Yarbro’s bill drew concern from Sen. Jack Johnson, R-Franklin, who said he was “nervous about creating the nexus with regard to workers’ compensation” because knowledge of the disease is still developing, and he feared “bogging down” the workers’ compensation system.
From March 1 through Aug. 9, Tennessee received 35,254 first reports of injury for all causes, significantly less than the 42,260 reports received during the same period in 2019. Not all first reports will become claims.
Of the 35,254 reports, 1,815 were related to COVID-19, and 740 pandemic-related reports were denied. Denials can be overturned through an appeal or after investigation, according to state department of labor spokesman Chris Cannon.
Insurance industry experts do expect that COVID-19 illnesses will ultimately cause the volume of claims to surpass workers’ compensation projections for 2020, according to Insurance Information Institute spokesperson Mark Friedlander.
“Most likely, we’re going to see significant impacts on profitability for workers’ compensation insurers,” typically one of the insurance industry’s most profitable lines, Friedlander told The Tennessean.
Sen. Paul Bailey, R-Sparta, suggested potentially revisiting the idea in January.
“In my opinion, what we would see is some stifling of the economy if we move forward with this type of legislation, because that would ultimately cause employers’ workers’ compensation to rise because of the unknown,” Bailey said.
Employers nationwide are concerned that workers’ compensation legislation due to COVID-19 would lead to “significant” premium increases for employers, according to Friedlander.
“Some employers and insurers have raised concerns that this will increase insurance costs for employers at a time when businesses already face significant financial challenges,” he said.
But according to the National Council on Compensation Insurance and the Insurance Information Institute, workers’ compensation rates being developed for 2021 rely on historical, pre-pandemic data, so the cost of COVID-19 claims will not be a factor in next year’s rates.
Friedlander noted that Congress has not taken any action that would change the workers’ compensation system.
For Harcombe, the debate comes down to choice and responsibility. Individuals can choose to reduce their COVID-19 exposure by avoiding bars and dining in restaurants, and in some cases, working from home. But front line workers, who are disproportionately people of color, often cannot choose to prioritize their health over their paycheck.
“Government isn’t about, or shouldn’t be about, protecting insurers,” Harcombe said. “It shouldn’t be about finding the cheapest way to do things. It should be about protecting the people in our society who need protecting, and in this case, I can’t imagine any people more obviously in need of protection than the essential workers who have been putting their own health and the health of their families on the line for the benefit of all of us for the past four months.”
Reach Cassandra Stephenson at [email protected] or at (731) 694-7261. Follow Cassandra on Twitter at @CStephenson731.