Californians Wait for Revised COVID-19 Prevention Emergency Temporary Standards

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

Over the past few weeks, Californians have eagerly awaited news from the State’s Occupational Safety and Health Standards Board (Standards Board) on revisions to Cal/OSHA’s COVID-19 Prevention Emergency Temporary Standards after the Centers for Disease Control (CDC) released its latest guidance that ease mask wearing for those who are fully vaccinated.

On June 3, 2021, the seven-member Standards Board first voted to deny a revised set of standards that would place additional requirements on business owners and most notably prevent fully vaccinated employees from being able to take off their masks in the workplace if everyone in the room was not vaccinated. However, in the same meeting, the Standards Board voted a second time which led to the approval of the revised standards which were set to go into effect no later than June 15, 2021 when the State is scheduled to fully reopen.

With pressure from businesses, community groups and California Governor Gavin Newsom, the Standards Board held an emergency meeting on June 9, 2021, where they unanimously voted to rescind the proposed standards previously approved on June 3, 2021.

If all of this sounds confusing, you are not alone.

As of the publication of this article on June 15, 2021, business owners should be following the COVID-19 Prevention Emergency Temporary Standards that were adopted in November 2020 and May 3, 2021’s Executive Order N-84-20 which allows for fully vaccinated people who have been exposed to a COVID-19 case, but show no symptoms, to remain in the workplace. Rancho Mesa has created a COVID-19 Prevention Plan template based on those requirements. It is available for download.

The Standards Board is scheduled to meet on June 17, 2021 where it is expected they will propose new standards that are more in line with the CDC’s masking recommendations. The agenda provides information on how to attend the virtual meeting.

When changes are made to the COVID-19 Prevention Emergency Temporary Standards, Rancho Mesa will update its COVID-19 Prevention Plan template and make it available to the public.

Stay up to date on this issue and others that affect California businesses by subscribing to our weekly Risk Management Newsletter and podcast.

California Workers' Comp Carriers React to Commissioner's COVID-19 Amendment Approval

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

With California Insurance Commissioner Lara’s recent approval of a special regulatory filing introduced to alleviate the burden COVID-19 workers’ compensation (WC) claims threaten to have on California employers, we reached out to several prominent carrier executives to share their thoughts.

The amendments address accounting for employees whose job duties have changed to clerical work, which is typically a less expensive workers’ compensation insurance classification than the jobs they were performing prior to Governor Newsom’s March 19, 2020 Stay-at-Home Executive Order. It also excludes payroll for furloughed employees who are not working, but collecting a paycheck. It creates a way to identify COVID-19 cases within the California workers’ compensation system and excludes the cases from the Experience Modification Rate (XMOD) calculation.

When asked about the amendments scheduled to take effect July 1, 2020, Margaret Hartmann, Senior Vice President and Chief Marketing Officer at Berkshire Hathaway Homestate Companies, California’s second largest workers’ compensation insurance carrier, said “Lara’s approval of the WCIRB [Workers’ Compensation Insurance Rating Bureau] proposal was not surprising. These are not unreasonable, at least from the perspective of ratemaking and predicting future experience of employers once COVID passes.”

Bryan Anderson, Senior Vice President at The Zenith explained the WCIRB’s amendments to the California Unit Statistical Reporting Plan and XMOD calculation were “not likely to change under any normal circumstances but the Bureau made these recommendations to address the unique pandemic situation that California (and the world’s) businesses find themselves in."

Another industry leader Paul Zamora, ICW Group’s Senior Vice President for Workers’ Compensation Underwriting said, “We support Commissioner Lara’s decision to approve the recommended changes by the WCIRB.  We believe the rule modifications accurately reflect changes in exposures created by COVID-19 and will provide the appropriate relief needed by California businesses.”

The changes were expected by California’s workers’ compensation insurance carriers as a mechanism to adjust employers’ insurance rates, since COVID-19 claims aren’t necessarily an indicator of a company’s safety record. 

“Under normal situations,” Anderson explained, “workers’ compensation covers only those occupational illnesses that are created from the work environment. In this instance, that understanding changed with the Governor’s Executive Order requiring employers to accept compensability for Covid-19 claims unless they can prove they are not work-related.”

Hartmann added, “This is clear cost-shifting to the industry, which we expected. The combination of a broad WC presumption, possible additional legislation extending these presumptions past July 5th, excluding COVID from ratemaking and XMODs, means that the insurance industry will absorb the lion’s share of COVID costs that can be assigned to WC.”

Zamora points out “it’s imperative that business owners understand the rule changes and adopt new practices, particularly with respect to the record keeping criteria associated with two of the changes. By adopting new record keeping procedures to apply to the new rules, policyholders will have the necessary audit documentation to realize the full value of Commissioner Lara’s decision.”

This means employers should start documenting employees’ hours worked under each class code, now, and not wait until a final audit.

“Hopefully, these measures will play a small part in helping California employers as they try to recover from the devastating impacts of this pandemic,” Hartmann concluded.

“I think this solution is a testament to the strength and objectivity of the Bureau, the companies it represents and to the integrity of the Workers’ Compensation Industry in California,” said Anderson.

Gene Simpson, CompWest’s Vice President of Underwriting and Marketing, added, “To confront the challenges presented by the COVID-19 pandemic to California employers, regulatory authorities, insurance carriers and employers must work together on effective solutions.”

While the amendments should reduce workers’ compensation premium costs for California businesses in the short-term, only time will tell how lower revenues and higher costs due to COVID-19 claims will impact California’s workers’ compensation insurance premiums in the future.

For a greater understanding of these changes and how they will impact your company, please contact our team at (619) 937-0164.

OSHA Recording Requirements for COVID-19 Cases

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

As businesses begin to reopen across the country, employers are now faced with the real possibility that one or more of their employees may be diagnosed with COVID-19. Those who are familiar with the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) recording requirements may be wondering how to handle an employee COVID-19 case on their OSHA logs.

California’s Division of Occupational Safety and Health (better known as Cal/OSHA) has released information for employers on the subject and it appears they are using their existing criteria for determining the recordability of an employee COVID-19 case.

According to Cal/OSHA, “California employers that are required to record work-related fatalities, injuries and illnesses must record a work-related COVID-19 fatality or illness like any other illness.” To be recordable on the 300, 300A and 301 forms, the COVID-19 case must be work-related and result in one of the following:

• Death.

• Days away from work or transfer to another job.

• Medical treatment beyond first aid.

• Loss of consciousness.

• A significant injury or illness diagnosed by a physician or other licensed health care professional.

The criteria that most employers may have a hard time determining is if the COVID-19 illness is actually work-related. Cal/OSHA addresses this in its Frequently Asked Questions webpage. First, the employer must determine if there was “an event or exposure in the work environment [that] either caused or contributed to” the COVID-19 case.

In order to determine if a case is work-related, employers should consider factors like:

• The type and duration of contact the employee had at work with other people including co-workers and the general public.

• With the implementation of physical distancing and other controls within the workplace, what is the likelihood of exposure?

• Did the employee come in contact with anyone showing signs and symptoms of COVID-19, while working? 

These considerations will help an employer determine whether or not the COVID-19 case is work-related and thus recordable. According to Cal/OSHA, it is best practices to err on the side of recordability when in doubt about how an employee was exposed to COVID-19.

If it is determined that an employee’s illness was work-related, yet, for a variety of reasons testing or the results from a test is unavailable and the employee has been determined to have COVID-19, “an employer must make a recordability determination” as to whether or not to record the case. While a positive COVID-19 test result would trigger recordability by the employer, a positive test is not always necessary to record the case in the OSHA logs.

Keep in mind, the above information is for OSHA recording of work-related COVID-19 cases only, which may be different from guidance for workers’ compensation claims.

Cal/OSHA states that “Governor Newsom’s Executive Order N-62-20 addresses eligibility for workers’ compensation benefits... The Order does not alter employers’ reporting and recording obligations under Cal/OSHA regulations.”

Rancho Mesa’s Risk Management Center offers employers the ability to track their COVID-19 cases electronically and generate the applicable OSHA 300, 300A and 301 forms along with an incident report and First Report of Jury (Form 5020).

To learn more about the Risk Management Center, contact our Clients Services Department at (619) 438-6869.

Commissioner Lara Approves WCIRB Proposed Amendments Addressing COVID-19

Author, Dave Garcia, President, Rancho Mesa Insurance Services, Inc.

California Insurance Commissioner Lara has approved, as filed, the proposed special regulatory filing submitted by the Workers’ Compensation Insurance Rating Bureau (WCIRB) concerning proposed amendments addressing the Coronavirus Disease (COVID-19). The special regulatory filing is effective July 1, 2020 and will apply retroactively starting March 19, 2020, the day California Governor Newsom issued the Stay-at-Home Executive Order N-33-20. Those amendments are as follows:

New COVID-19 Rule: Clerical Office Employees

Part 3, Section III, General Classification Procedures, was amended to add Rule 7, Coronavirus Disease 2019 (COVID-19), to permit during a statewide California COVID-19 stay-at-home order the following: The division of an employee’s payroll between Classification 8810, Clerical Office Employees, and a non-standard exception classification when the employee’s work is exclusively clerical in nature and the non-standard exception classification does not include Clerical Office Employees. This amendment will conclude 60 days after the Stay-at-Home Executive Order N-33-20 is lifted.

New COVID-19 Rule: Basis of Payroll

Part 4, Section IV, Exposure Information, Rule 1, Classification Code, and Rule 4, Exposure Amount, were amended to report payments excluded from remuneration pursuant to new Rule 7, Coronavirus Disease 2019 (COVID-19). Payments made to an employee while the employee is performing no duties of any kind in service of the employer are to be excluded from payroll when the payments are equal to or less than the employee’s regular rate of pay. This amendment will conclude 30 days after the Stay-at-Home Executive Order N-33-20 is lifted.

New COVID-19 Rules: Claims Reporting

Part 4, Section V, Loss Information, Rule B, Loss Data Elements, Sub rule 4, Catastrophe Number, was amended to add Catastrophe Number 12 for the reporting of COVID-19 claims. Appendix III, Injury Description Codes, Section B, Nature of Injury (Positions 3-4), and Section C, Cause of Injury (Positions 5-6), were amended to add a Nature of Injury code and a Cause of Injury code for COVID-19 claims. This amendment includes claims with an accident date after December 1, 2019, reported on a Unit Statistical Report due on or after August 1, 2020, and reported with a Catastrophe Number 12.

Exclusion of COVID-19 Claims from Experience Modification

Section VI, Rating Procedure, Rule 2, Actual Losses and Actual Primary (Ap) Losses, was amended to specify that all claims directly arising from a diagnosis of Coronavirus Disease 2019 (COVID-19) shall not be reflected in the computation of an experience modification.

For a greater understanding of these changes and how they will impact your company please contact our team at (619) 937-0164.

CA Governor Issues Executive Order Making Workers’ Compensation Benefits More Readily Available to Essential Workers

Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.

On Wednesday, May 6 2020, California Governor Gavin Newsom issued an Executive Order making workers’ compensation benefits more readily available to essential workers.

The Executive Order states “any COVID-19-related illness of an employee shall be presumed to arise out of and in the course of employment for purposes of awarding workers’ compensation benefits if all of the following requirements are satisfied:

a.  The employee tested positive for or was diagnosed with COVID-19 within 14 days after a day that the employee performed labor or services at the employee’s place of employment at the employer’s direction;

b.  The day referenced in subparagraph (a) on which the employee performed labor or services at the employee’s place of employment at the employer’s direction was on or after March 19, 2020;

c.  The employee’s place of employment referenced in subparagraphs (a) and (b) was not the employee’s home or residence; and;

d.  Where subparagraph (a) is satisfied through a diagnosis of COVID-19, the diagnosis was done by a physician who holds a physician and surgeon license issued by the California Medical Board and that diagnosis is confirmed by further testing within 30 days of the date of the diagnosis.”

Insurance companies have 30 days from the date of a COVID-19 diagnosis to rebut with evidence.

According to the Executive Order, the presumption pertains only “to dates of injury occurring through 60 days following the date of this Order.”

The order establishes a rebuttable presumption that any essential workers infected with COVID-19 contracted the virus on the job. It is important to understand the order shifts the burden of proof from the injured worker and now requires employers or insurance companies to prove the employee didn’t get sick at the place of work.

Prior to the change, it was difficult to prove workers’ compensation claims related to a COVID-19 infection.

Rancho Mesa’s Response

In response to the Executive Order and other proposed rule changes, Rancho Mesa President David Garcia interviewed Berkshire Hathaway Homestate Companies President Rob Darby on the impact to California businesses and the workers’ compensation market. Berkshire Hathaway is one of the largest workers’ compensation insurance companies in California.

Read Governor Newsom’s Executive Order on Cal/Gov website.

Please contact your Rancho Mesa broker with questions specific to your business.