California’s COVID-19 tracking requirement challenges employers

A new California requirement that employers report to their workers compensation insurers any COVID-19 cases, whether work-related or not, has led to concerns that employers will struggle to comply.

S.B. 1159, which Gov. Gavin Newsom signed into law on Sept. 17, creates an avenue for workers who test positive for COVID-19 to file a workers compensation claim if certain criteria are met, including that there is found to be an outbreak of the virus in the workplace — a stipulation that creates more obligations for employers already strapped with new safety requirements, according to legal experts who say the new rules might be too taxing.

“The employers, irrespective of whether there is a claim filed, have to report this information every time there is a positive COVID test,” said Michael Sullivan, El Segundo, California-based general managing partner of Michael Sullivan & Associates LLC. “They have to include how many employees are present at every (work site). It creates an incredible burden for employers.”

“My greatest concern is that the average employer … is not aware of (the tracking requirement) and is not going to be aware of it,” said Jeff Adelson, a partner with the Newport Beach, California, firm Adelson McLean P.C., who said there appears to be a lag in employers knowing what to do and when.

“I don’t know how that is going to really help if insurance companies and brokers don’t go out and advise them of what the (requirements) are.”

The tracking requirement, which comes with a $10,000 fine for each incident of failing to comply, states that when an employer “knows or reasonably should know” that an employee has tested positive for COVID-19, it must report it to its workers compensation insurer within three business days. The report must include such details as the date the employee tested positive, the specific address or addresses of the employee’s place or places of employment during the 14-day period preceding the positive test, and the highest number of employees who reported to work in the 45 days preceding the last day the employee worked in the workplace. For employers whose employees visit multiple work sites, the paperwork could be daunting, experts say.

Failing to track cases and possibly outbreaks at multiple locations could “get expensive really fast,” Mr. Sullivan said.

However, the new requirement comes with a plus side, according to Martha Doty, Los Angeles-based counsel at Alston & Bird LLP.

“It imposes administrative burdens on companies that do business here in California, but it is also designed to encourage employers to comply and take necessary safety protocols to prevent COVID outbreaks,” she said, adding that she is confident employers will catch on as they have with other requirements that have come into play in the pandemic.

“My sense is that California employers are becoming aware of steps they have to take when their employees report positive COVID tests, and that they understand that this gives rise to potential workers comp claims and benefits, and that they will now know that there is this additional step in timely reporting to their carrier,” she said.

“As burdensome as this may seem, the intent is to follow the precautions. If you are to put a positive spin on it, (this) will encourage employers to follow safety protocols, staying on top of them and not just giving lip service.”

Meanwhile, third-party administrators have been stepping up to meet the challenges of reporting to understand where an outbreak may occur or has occurred. Under the new law, an outbreak is defined as four or more cases at work sites with 100 or fewer workers or 4% of a workforce at a work site with more than 100 employees.

Memphis, Tennessee-based Sedgwick Claims Management Services Inc. earlier this month launched a COVID-19 intake portal to simplify the tracking requirement. Max Koonce, Fayetteville, Arkansas-based chief claims officer for the third-party administrator, said the cloud-based portal is an extension of existing claims-reporting software that enables employers to create reports on COVID-19 cases, whether they become claims or not.

“It was a very easy pivot because of the information that was going to be required; the system had the capacity,” he said.

Irvine, California-based CorVel Corp. has also introduced a software solution to ease tracking for employers.

The program provides “quick, streamlined electronic information at the location level” for employers, said Michele Tucker, Sacramento, California-based vice president of enterprise operations at CorVel. “We felt like that was important to keep track of outbreaks as soon as possible, and we really wanted a centralized site for visibility.”

This article was first published by Business Insurance.

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