Moving into 2021: 3 Key Trends in Workers’ Compensation Insurance

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BY:
Todd Pollock

Senior Vice President

January 5, 2021

This past year brought a number of new challenges for the insurance industry. As we look ahead to a new year, here are the top three Workers’ Compensation (WC) trends from leading industry sources. Your employer clients should be aware of these in 2021, as they could impact a range of business operations.

Telemedicine Services
Since the start of COVID-19, there has been a significant increase in telemedicine services listed on insurance claims. In fact, according to FAIR Health’s Monthly Telehealth Regional Tracker, telehealth claim lines increased 4,347% nationally in 2020 — a substantial jump from 0.17% in March 2019. It is predicted that this advanced technology will continue to be front and center, with 5% of all doctor visits in 2021 being virtual — five times what they were in 2019.

For injured workers, telemedicine has been instrumental in allowing employees to get the treatment they need while avoiding the risks associated with in-person visits or having to wait to speak with a doctor and delaying their treatment. However, statutory and regulatory requirements governing the use of telemedicine vary widely by state and can even differ for injured workers receiving medical care under WC. According to the National Council on Compensation Insurance (NCCI), there will continue to be questions in 2021 as to how COVID-19 will impact the utilization and accessibility of telemedicine services for WC, including whether certain states will elect to adopt/implement permanent telemedicine regulations and provisions, how certain provider requirements may change, and how carriers will be reimbursed for services — to name just a few.

Mega Claims
Extremely large, or “mega,” WC claims involve very serious on-the-job injuries or illnesses and typically total $3M or more in incurred losses. In addition to these claims having a lasting impact on employees, businesses can incur steep court costs, lost time and the potential for reputational damage. According to a 2020 countrywide WC report, sectors hit the hardest over the past few years by these types of mega claims were construction ($10M and higher), office and clerical ($5M to $10M), and manufacturing, stores and dealers, transportation, and all other industries ($3M to $5M). The most common mega claims involved head/brain and neck/spine injuries and injuries involving multiple parts of the body.

In 2021, WC losses are likely to increase in both frequency and severity. According to the Insurance Research Council (IRC), key drivers of mega claims can be largely attributed to social inflation — a growth in liability risks and costs related to litigation trends — leading to a rise in claims and losses that ultimately result in more expensive insurance for businesses and consumers. Given this upward trajectory, it will be critical to proactively identify potential areas of risk with your business clients and to adjust risk mitigation strategies.

The Impact of COVID-19
According to NCCI, pandemic-related issues will continue to be a top trend and concern of insurance leaders going into 2021. Concerns include whether COVID-19 compensability measures that have been enacted in multiple states will become permanent or evolve to include other diseases, how to best evaluate risks in the current environment, and the impact of compensable injuries and worker safety with more employees working from home.

There are also compliance issues to consider. According to the Workers Compensation Research Institute (WCRI), the number of employees who may be covered by various state laws and executive orders providing some level of compensability for workers who acquire COVID-19 on the job will differ vastly. Data by the WCRI and the U.S. Bureau of Labor Statistics predict that the number of workers who may be covered by the various laws and orders will help specific classes of workers have easier access to WC if they become infected by COVID-19. Recent examples are Alaska, Arkansas, Indiana, Kentucky and Missouri, where it is predicted that employees soon will be covered by a COVID-19 law or order and assigned an exposure risk factor for each individual industry or occupation. The WCRI reports that it will continue to offer predictions of workers covered by these executive orders and laws so businesses can stay informed.

Staying informed about WC issues and trends can help insurers, employers and other stakeholders better manage emerging risks. At Worldwide Facilities, we’re here to help address WC issues that can impact businesses and employees, so you and your clients can create a solid risk mitigation strategy for a safer workplace.

For more information, please contact Todd Pollock at 508-625-3547 or tpollock@wwfi.com.

Additional sources: The National Workers’ Compensation and Disability Conference, Department of Risk and Insurance at the Wisconsin School of Business Center for Insurance Policy and Research at the National Association of Insurance Commissioners, and The Triple-I Blog.

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