On September 14, 2020, NJ’s Governor Murphy signed a bill into law making it easier for “essential workers” who have contracted the coronavirus to receive workers’ compensation and other employment-related injury benefits, without the burden of proving they contracted the virus in the course and scope of their employment.  This law is effective retroactively to the Governor’s state of emergency declaration on March 9, 2020.

If an “essential employee” contracts COVID during the current public health emergency during a time period in which the individual is working outside of their own residence, there is a rebuttable presumption that the disease is work-related and fully compensable under workers’ compensation.  It may be rebutted by “a preponderance of the evidence showing that the worker was not exposed to the disease while working in the place of employment other than the individual’s own residence.”  This effectively requires the employer to prove a negative.  This is not impossible, but it’s not easy either.

The new law broadly defines “essential employees” in both the public and private sectors. This includes any public safety worker or first responders, such as fire, police and other emergency responders, and individuals who provide medical and other healthcare services, including emergency transportation, social services, and services provided in healthcare facilities, residential facilities and homes. Those in the private sector covered under this legislation, in addition to individuals in the business of healthcare, are those individuals who perform functions that involve physical proximity to the public at large and provide functions essential to the public's health, safety and welfare. This would include transportation services, hotel and other residential services, financial services, and the production, preparation, storage, sale and distribution of essential goods such as food, beverages, medicine, fuel, and supplies. A catch-all provision is contained in the bill to include any other employee deemed to be essential by the public authority declaring the state of emergency. 

This law has been anticipated since shortly after Governor Murphy declared a NJ public health emergency due to COVID-19 in early March.  Its enactment, as well as similar proposals in other states, has been controversial.  While it is beneficial to the employee, it will potentially require employers and insurance companies to pay for claims that might not have otherwise been paid by workers’ compensation policies.

For fully-insured employers, there is some protection built into the law from these additional claims impacting their insurance premium.  Most importantly, the new law prevents these COVID-19 claims from being included in an employer’s Experience Modification Factor calculation, which directly impacts premium.  NJ’s Insurance Commissioner similarly modified the workers’ compensation experience rating rules to exclude these claims from Experience Modification Factor calculations earlier in the year.  However, this is not a guarantee that insurance premiums will remain unaffected.  It’s only one piece of the puzzle.  The additional claims still impact an employer’s loss experience and the perceived profitability of their policy to an insurance company.  An insurance company can use other factors to increase premium or decide that they do not want to offer insurance to that employer at all.  For self-funded employers or those on other types of loss-sensitive rating plans, these additional losses will directly impact their workers’ compensation costs.  

We encourage you to speak with your attorney to help determine if this new law is applicable to you or your employees.  Please do not hesitate to reach out to your Borden Perlman representative with any questions.