It is up to the insurance commissioners in each state, however, to adopt these rules.

As a result, insurance commissioners in states such as California, Indiana, and North Carolina have promulgated regulations that permit employers to temporarily change worker classifications in recognition of the lesser degree of risk of many of their employees. 

Some states, such as California, have gone further and indicated that losses from COVID-19 are not to be included in calculating experience modifications and other rating factors. A news release from the California Department of Insurance says:

“This new regulation will also exclude claims related to a COVID-19 diagnosis from being included in future rate calculations so that employers are not penalized with higher rates due to COVID-19 claims.

“Insurers will also be required to report injuries involving a diagnosis of COVID-19 which will allow the Commissioner’s statistical agent — the WCIRB [Workers Compensation Inspection Rating Bureau] — to keep track of COVID-19 injuries, and will aid in the WCIRB’s future analyses of the workplace and market impacts.

“The new regulations will go into effect on July 1, 2020.”

To further relieve employers of paying premiums on employees furloughed during the pandemic, some state insurance commissioners, such as California’s, have made additional changes. According to California Insurance Commissioner Ricardo Lara:

“These emergency regulations also exclude from premium calculations the payments made to an employee, including sick or family leave, while the employee is not performing duties of any kind for the employer. Typically, these payments would be used as a basis for the employer’s workers’ compensation premium. This change will lower the employer’s rate by reducing the amount of payroll assessed, and the employer will not pay premium for paid workers who are otherwise being furloughed.”

Please contact your EPIC PCOC Insurance Program professionals at 877.860.7378. We are eager to help.