As 2022 begins to wrap up, I want to reflect on where we are as an industry, discuss current workers’ compensation trends, and think about the year ahead. Workers’ compensation is complex and ever-changing, so there is plenty for business owners and leaders to keep an eye on. Here are some workers’ compensation trends on top of our minds at ICW Group that may impact insureds.
How does an independent contractor differ from an employee?
An essential element of workers’ compensation is determining whether a worker is considered an employee or an independent contractor. Unfortunately, this issue has become more complicated with different payroll regulations and varying state legislation. States have attempted to clarify the issue through legislation over the last couple of years, but the courts have invalidated some of those laws leading to more confusion.
To understand your state’s laws relating to workers’ compensation for independent contractors, work with your agent or underwriter to ensure you are mitigating potential issues. You don’t have to navigate this arena alone.
Will the labor shortage continue?
Many of our insured have struggled with the national labor shortage over the past years and this phenomenon continues. Some economists believe the labor shortage may be a permanent change as the pandemic accelerated the retirement of the baby boomers, leaving us with a dwindling labor force.
Jobs with the greatest shortage of workers are typically hourly employees and frontline workers, and due to shortages, many frontline employees are being asked to work overtime. Excessive overtime can lead to employee burnout, more turnover, poor health and increased incidence of injury. Additionally, inadequately trained staff, longer shifts, and fatigue can lead to increased claims frequency.
If your business is experiencing a labor shortage and the many challenges that go along with it, putting strong health and safety strategies in place, including ergonomic programs, will help prevent injuries due to overexertion. Work with your carrier’s risk management team to assess and develop your safety and training programs. We’ve got thousands of resources available to help keep employees – both long and short term – safe on the job.
What is the future of communicable diseases?
With the emergence of COVID-19, we endured a rapidly changing environment as it relates to what is and what is not covered. It’s probably safe to say we’ve experienced nothing like that before. Workers’ comp was designed to cover risks particular to employment, from traumatic injuries to occupational diseases, not global pandemics. Many states have now enacted presumptions that COVID-19 is work-related under certain conditions. Some states are expanding compensability beyond COVID-19, which could open the door to future disease outbreaks being covered under workers’ compensation. There are no certainties about what this will look like in the future. Again, working closely with your agent and underwriter will help you navigate what may come.
How will the work comp regulatory landscape shift?
Employers are no strangers to rapid and ongoing regulatory shifts. It’s a part of the job. Here are some key regulatory items impacting the insurance industry and insureds now and will continue to do so into the future.
Medical Marijuana – It’s expected that the Federal Drug Administration will approve medical marijuana at the federal level in 2023. Any changes at the national level will be a major shift for the workers’ compensation industry and will speed up the national conversation about reimbursement, banking, impairment, insurability and more. Already many states are grappling with medical marijuana reimbursement so expect this issue to get more dynamic in the year ahead.
New Provider Types – New types of care providers, such as chiropractic assistants, have been approved to bill for workers’ compensation claims in some states. Others have expanded rules for nurse practitioners and physician assistants. As the shortage of primary and specialty care physicians continues, we may also see these expansions continue, which could affect precertification, billing, reimbursement and bill review systems.
Work From Home Claims – As more employees regularly work remotely, we’re starting to see workers’ comp claims filed due to injuries occurring in home offices. As these cases continue to arise and go to court, new case law will be developed to help determine how the industry should cover such injuries, such as when a remote employee trips over a printer cord during work hours.
COVID-19 Presumptions – As the federal government institutes COVID-19 vaccine mandates for employees, some states are also considering further broadening their presumption laws to cover any adverse reactions from the vaccine. If these rules are put into place, it could set significant precedence for the work comp industry.
As these and many other areas impacting your policy evolve, let us know if you have questions. As your workers’ compensation partner, we are here to help.