The Bigger Picture of COVID-19 Data

CWCI Claims' Data Trends

According to CWCI data, COVID-19 currently represents about 13 percent of all workers compensation claims. Since the last Out Front Ideas presentation of CWCI's data in February, California's claims count of infections has grown by 31 percent and 51 percent in terms of additional fatalities. California represents about 12.5 percent of the US population but makes up about 10.7 percent of infections and 10 percent of deaths.

In the early days of the pandemic, California's working-age population was used to estimate the overall effect and cost on the system. This group's infections and fatalities have increased, representing 3-out-of-4 infections and about 1-in-every-4 deaths. However, death claims continue to be more prominent in the older age groups. The over-50 age group represents 54 percent of non-COVID-19 death claims and 72 percent of COVID-19 death claims. There is also a higher proportion of females represented in COVID-19 fatalities due to the gender mix in the hardest-hit industry, health care.

Health care and public safety workers still make up the majority of COVID-19 claims, including death claims. Since February 2021, health care's COVID-19 claims have dropped from 31 to 23 percent. In that same time frame, first responders' COVID-19 claims increased from 17 to 23 percent, and transportation's COVID-19 claims doubled from 6 to 12 percent.

CWCI has also seen a drop in claims reporting in the 14–30-day period on COVID-19 claims. This could be an early indicator of the emergence of long-hauler claims or a new trend in litigated claims for COVID-19.

Denial rates are also increasing due to the pandemic having a broad societal impact, with 19 out of every 20 infected working-age Californians not reporting an industrial cause. Other factors impacting compensability include essential employee status, presumption laws, outbreaks, shelter-in-place requirements, investigation, and reporting requirements.

In a sample of 20 insurers and 13 public and private self-insureds, representing 65 percent of all fourth-quarter denials, 3 core denial reasons were cited: medical verification, nonindustrial reasons, and reporting errors. Medical verifications dealt with employees that had a negative COVID-19 test or did not take a required polymerase chain reaction test. Nonindustrial reasons involved claims where the employee was not exposed at work, withdrew the claim, or failed to cooperate. Reporting errors were due to a submitted claim not representing an employee or a positive test was not associated with industrial causation. Since medical verification and reporting errors are unique to COVID-19, if these two categories are removed from the fourth quarter figures, the adjusted denial rate, only including nonindustrial reasons, drops from 37 to 11.8 percent. Compared to a non-COVID-19 denial rate of 11.6 percent, there is virtually no difference.

Safety National's Claims Data Trends

As a leading provider of excess workers compensation for self-insured entities, around 40 percent of Safety National's accounts fall into two largely self-insured industries: public entities and healthcare networks. Because self-insureds are not required to report data to bureaus, much of these two industries are likely not included in bureau data. These industries also represented the frontline workers more likely to be exposed to COVID-19, making up the majority of claims.

Roughly 40 percent of Safety National's claims came through as report only, and the other 60 percent make up the actual claim activity. Even with the delta variant on the rise, Safety National's COVID-19 claims are trending down as of August 2021. This inconsistency with CWCI data could be due to municipalities and healthcare workers missing from the data, vaccine availability, and safety protocols.

Between January and August 2021, there hasn't been a considerable change in the percentage of each age group's makeup of the COVID-19 claims share. The 26–35 age group makes up the largest portion at 29 percent. Consistent with CWCI data, the older age groups, age 56–65 and older, make up the largest portion of the death claims. Unlike CWCI's data, male deaths continue to exceed female deaths in Safety National claims.

The healthcare sector still makes up the largest portion of death claims but saw a 3 percent decrease in reported claims since February 2021. From January through July 2021, COVID-19 death claims increased from 0.36 to 0.60 percent.

When reviewing the cost breakdown of COVID-19 claims, 99 percent of Safety National's claims are under $100,000, but of those that exceed $100,000, 89 percent range from $100,000 to $1 million, and 11 percent are over $1 million. Safety National has seen a number of COVID-19 claims with incurred expenses of over $1 million, including death claims and extensive hospitalizations. There have also been a few claims with incurred over $3 million due to extensive complications that led to organ transplants, brain injury, and even quadriplegia.

Sedgwick's Claims Data Trends

Most of Sedgwick's COVID-19 claims occurred within their top three represented industries: retail, public sector, and health care. Health care represents 46 percent of the total claims, remaining unchanged since the end of 2020. The public sector claims volume has increased, representing about 20 percent of the claims volume. Retail accounts for roughly 16 percent of the claims volume. These three industries are responsible for 80 percent of the total COVID-19 claims.

Sedgwick has received roughly 110,000 workers compensation COVID-19 claims since the beginning of the pandemic. In comparison, that figure was closer to 75,000 at the end of 2020, with the majority of additional claims added between January and February 2021. The top five states reporting COVID-19 claims are California, Texas, Michigan, Florida, and Illinois, with California representing roughly 28 percent of the total claims.

For Sedgwick, 7.4 percent of COVID-19 claims remain open, and 90.4 percent are closed with an average paid cost of less than $2,500. The remaining 1.4 percent are litigated, which mostly involves denied claims. The average incurred cost is 75 percent lower than non-COVID-19 claims, and the duration is also 33 percent shorter than non-COVID-19 claims.

Sedgwick's COVID-19 claims are evenly distributed across all age groups with no definitive breakouts. However, the severity of cases was higher among the older age groups.

When looking at cost breakdown, 96 percent of the claims have very nominal costs, involving little-to-no missed work. The high-dollar claims associated with complex cases and fatalities represented only 4 percent of the total claims but accounted for 81 percent of the costs.

Of the claims involving workforce absences, 85 percent involved leave of absence, 14 percent involved short-term disability, and 1 percent involved Americans with Disabilities Act regulations. Roughly 20 percent of short-term disability absences were COVID-19-related. Still, the average cost on those was 29 percent lower than non-COVID-19 cases and had an average duration that was 65 percent lower than non-COVID-19 cases. California also had more than twice the number of COVID-19 leave of absence cases than any other state during the prior 19 months, with 5.4 percent of COVID-19 leave-of-absence cases being denied and 46 percent of all COVID-19 leave-of-absence cases being from the retail industry.

Telehealth has made incredible progress throughout the pandemic, with about 20 percent of initial evaluations or doctor visits performed virtually at its height. Prior to the pandemic, telehealth represented less than 10 percent of those visits. Now, telehealth makes up about 10 percent of those visits but continues to be utilized in workers compensation. Its impact has resulted in a shorter duration of short-term disability in both surgical and nonsurgical claims. It also resulted in less time away from work, and cases involving physical therapy telehealth saw a shorter duration versus in-person visits.

While vaccine reaction claims have occurred, they represent a tiny percentage of COVID-19 claims. With these claims accounting for only 0.2 percent of total claims, 91 percent were medical only, involved only a few days of missed work, and were closed within 45–60 days. Additionally, 31 percent of those cases have been denied, as this is a state-specific issue.