Navigating the Uncharted Waters: COVID-19's Impact on Workers' Compensation

The Evolving Landscape of Workers' Compensation in the Age of COVID-19

The COVID-19 pandemic has introduced unprecedented challenges to the workers' compensation system. As businesses navigate the complexities of reopening and adapting to new safety protocols, the impact on workers' compensation claims remains uncertain. Sean Cooper, a senior actuary at NCCI, highlights that the economic downturn caused by the pandemic differs significantly from the Great Recession of 2008-09. While the earlier recession saw gradual job losses primarily in construction and manufacturing, the current crisis has disproportionately affected sectors like hospitality, leisure, and travel.

Adapting to New Norms: Telecommuting and Its Implications

Dr. Steven Weisbart, chief economist at Triple-I, predicts that telecommuting will become a new norm post-pandemic. This shift could lead to a reduction in office space rentals, potentially altering the commercial real estate landscape. Additionally, the adoption of robotics and machine jobs may increase, which could lead to a decrease in human-performed jobs. These changes could influence the types of jobs available and the skills required in the workforce.

Modeling the Unpredictable: Pandemic Catastrophe Provisions

Traditional methods for calculating workers' compensation impacts may not suffice for low-frequency, high-severity events like pandemics. Jeff Eddinger from NCCI notes that the organization is exploring the feasibility of pandemic catastrophe provisions for future rate filings. This approach is similar to the terrorism models applied after 9/11, but with the added complexity of varying compensability rules across different states.

For businesses, understanding these evolving dynamics is crucial. Staying informed about legislative changes and adapting to new workplace norms can help mitigate risks and ensure compliance with workers' compensation regulations.