Light-duty Takes a Hit From L&I and COVID-19
We were disappointed to learn that L&I plans to pay time-loss for any employees who were on a light-duty assignment that is not available due to COVID-19 and stay-at-home requirements. In other words, if your injured employee has been at home and away from their approved light-duty position, they are eligible for time-loss payments.
“This decision will have a huge impact on thousands of Washington employers,” said Jamie Graham, VP Claims at Approach. “It’s unfortunate that L&I has decided to not waive the costs associated with the time-loss payments, as the decision will impact companies for years to come in the form of higher insurance rates.”
Action plan for employers with light-duty workers
It’s critical to act right away if you have any employees assigned to light-duty for an open workers’ comp claim:
- Contact your Approach Retro Coordinator so we can update our files and build an action plan with you. Retro coordinators are available by email and phone as usual, or by calling 800-626-0846.
- Create a work-from-home light-duty position, if possible. The best-case scenario is to create a bona-fide light-duty job that (a) furthers the employers’ business and (b) can be performed at the employee’s home. We can submit this new job description to the attending provider for approval, maintaining your access to Stay-At-Work reimbursements.
- Pay Kept-On-Salary (KOS) if light-duty is not available. We recognize this is a big ask at a time when many employers are struggling. However, keeping one injured employee on full salary can be cheaper than paying higher insurance rates for all of your employees in the future.
- Understand the impact of time-loss. Your retro coordinator can prepare a detailed financial analysis to estimate the impact of time-loss on your future rates and retro refunds. This will help you determine if KOS is the better option or to prepare for the impacts of time-loss.
If there is a silver lining, it is that new claims arising from coronavirus won’t affect your EMR, claim-free discount or Retro refunds. While we welcome this news, it will help a relative handful of employers. Many more employers face rising costs due to the impact on existing claims that were completely unrelated to coronavirus, but now stand to have time-loss expenses as a result of this decision.
The complete text of the L&I announcement is below. We urge you to contact your L&I account manager to (politely) register your comments on these decisions. It is important for L&I to hear from employers about the impact this decision will have. As always, contact Approach with any questions on how your current claims may be impacted.
Text From Washington State Department of Labor & Industries’ Press Release:
April 8, 2020
COVID-19 and workers’ compensation: frequently asked questions answered
In response to questions from employers and their representatives, the Department of Labor & Industries has made certain policy decisions to provide some financial relief to state fund employers from the impact of allowed COVID-19 claims. These decisions are outlined in the “Frequently Asked Questions” (FAQ) below. We also want you to be aware of premium reporting requirements under certain circumstances such as when a business has been closed as a result of the pandemic, yet the employer is continuing to pay their workers. And we’ve clarified that injured workers whose temporary light duty ends are entitled to time-loss compensation. If you have any questions please contact your account manager or retrospective rating representative.
Common questions from employers with workers’ compensation insurance through L&I
Will coronavirus (COVID-19) claims impact an employer’s experience modification factor and claim-free discount (if applicable)?
No. All losses for allowed coronavirus claims, regardless of whether the virus is contracted, will not be included in the determination of an employer’s experience modification factor. An employer will not lose their claim free discount as a result of an allowed coronavirus claim.
What will the impact to retrospective rating calculations be for losses from coronavirus claims?
It’s important that the claims included in experience factor calculation, retrospective rating adjustments, and for rating purposes align. Therefore, the losses for allowed coronavirus claims will not be included in the retro adjustment calculations.
If an employer has a worker on temporary light duty and their business is closed due to the pandemic, is the worker eligible for time-loss benefits? Will these losses be included in the employer’s experience factor?
The worker is eligible for time-loss benefits unless the employer chooses to keep them on salary. The law is clear in situations where temporary or transitional light-duty work comes to an end, regardless of the reason it’s ending. The law recognizes that these workers are restricted from being able to perform their regular employment or jobs, other than the light-duty one.
Only losses for allowed coronavirus claims are being removed from the experience factor calculations.
Does an employer need to report hours when their business is closed during the pandemic, or when a worker is continuing to be paid or kept on salary but not actually working?
If an employer continues to pay a worker while their business is closed during a coronavirus quarantine, or to maintain the worker’s salary on an open claim, if the worker is not actually working the hours don’t need to be reported.
If you have hourly workers who are continuing to be paid and not working as a result of the pandemic, you are not required to report hours and premium for the time they are not working.
If you have salaried workers reporting actual hours worked (hourly method), continue to do so.
If you have salaried workers and report 480 hours per quarter (salary method), you may report the actual hours they worked.
Note: regardless of how you report, you are required to keep a record of these non-work hours in your payroll system. Please refer to WAC 296-17-35201 for recordkeeping and retention.
If you have further questions regarding reporting, contact your account manager at 360-902-4817.
Retrospective Rating Program
WA State Department of Labor & Industries
PO Box 44180
Olympia, Washington US 98504-4180