A Letter from the President
COVID-19 impact on Workers Compensation in Indiana
By: Karen H. Byrd
My favorite word that I have adopted since the beginning of the COVID-19 pandemic is PIVOT. Plans are made and schedules fill up, but suddenly an inevitable change comes, and you must pivot in a different direction. While some people like the straight road and have difficulty adjusting to changes, I personally enjoy a back-country winding road with lots of curves. I find that the views are better and I am fully engaged in the driving experience. This can be said about interruptions in the workforce. The ability for employers to be flexible has never been more important than in the past 2 years.
At the beginning of this pandemic, everyone in the insurance industry was trying to predict how this would affect future workers compensation rates. Since carriers are not required to report unit statistical data (claims data) to us until 18 months after the inception of a claim, this meant that we would not see the financial impact of these claims until September of 2021.
To obtain better insights into what was happening in Indiana, the ICRB collaborated with the Workers Compensation Board (WC Board) to obtain an update on weekly COVID-19 claims filed, the number of death claims associated with COVID, and the number of accepted and denied claims. Additionally, the ICRB joined a multi-jurisdictional research project which focused on 45 states and the financial impact we are seeing across the country.
Surprisingly, the results we are starting to see shows that Indiana employers and employees faired well during the pandemic from a workers compensation perspective. As of 1/3/2022, 18,789 COVID-19 workers compensation claims have been received by the WC Board. Of those claims, 12,115 have been denied, 8,127 claims have been deemed compensable and of the 18,789 claims filed, 57 of those were death claims. The discrepancy in the number of denied and compensable claims as compared to the overall total is likely based on settlements reached by the carrier and employee on denied claims. According to the Indiana COVID-19 dashboard, IN Coronavirus Dashboard, the overall impact of COVID to our entire state’s population between 3/2/2020 and 1/2/22 is 1,278,285 testing positive and 18,433 deaths. Comparing this to the WC Board’s information, this means that workers compensation claims account for 1.5% of the total number of COVID positive people in our state and workers compensation death claims account for 0.3%.
So, what does this mean to carriers and employers from a financial perspective? The multi-jurisdictional report, which was published on our website in December shows that Indiana COVID-19 claims represent 9% of total workers compensation claim counts and 1.6% of incurred losses. Indemnity-only claims emerged as a significant share of reported COVID-19 claims. In aggregate, COVID-19 claims that remained open have relatively higher case reserves due to the uncertainty of COVID-19 infections, later than average accident dates, and timing of the various waves of the pandemic. COVID-19 indemnity claims closed more quickly than non-COVID-19 indemnity claims, partly driven by the large share of indemnity-only claims. Despite the higher closure rate, the ratio of paid to paid + case losses on COVID-19 claims is lower when compared with that for non-COVID-19 claims. You can access the full report for Indiana and the other participating states at: Multi-Jurisdictional COVID-19 Press Release. We will distribute quarterly updates of this report on an ongoing basis.
Now that we are dealing with the Delta and Omicrom variants of COVID, it is hard to predict if this will impact the current statistics in a dramatic way. While more people are getting out of their homes, gathering with others outside of their households and many still working remotely, exposure, from a workers compensation view, is likely to remain stable or even decrease.
I hope this information has been helpful. We at the ICRB remain committed to tracking and researching this data and providing you the latest information as it becomes available.
Our Annual Report was published to our website in November and has more detailed information on the ICRB’s overall performance in 2021. You can access the report from our website or by using this link: ICRB 2021 Annual Report.
I wish you and your family a very happy and healthy new year!