EPIC Risk Advisory Bulletin
Volume 1, Issue 15
The global COVID-19 (coronavirus) pandemic remains both dynamic and fluid. We continue to see unprecedented disruptions at home and abroad. In this issue, we take a focused look at:
- General Information on Coronavirus
- Supply Chain and Business Risks
- Mass Transit Challenges Lie Ahead
- Insurance Products and Coverage Information
- Proposed Legislation for BI Claims Federal Backstop
- Legislation and Litigation Roundup
- Human Resources and Employee Benefits
- I-9 Exceptions Extended
- Return to Work Update
- Insights from Across the Firm
Additional Benefit Offerings
Are there any new value-added benefits you are considering that could help address employee needs specific to the pandemic? Take Survey
Have you shifted any of your wellness initiatives to a virtual approach, and are you considering any new programs or a new communication approach? Take Survey
Assessing Financial Risk
Do you have the ability to assess financial risk to your health and welfare plans as a result of the pandemic, and what changes have you made related to cost-sharing and budgeting for medical and prescription drug expenses? Take Survey
General Information on Coronavirus
The best sources overall for timely information on the coronavirus pandemic remain the Centers for Disease Control (CDC), the World Health Organization (WHO) and Occupational Safety and Health Administration (OSHA).
EPIC continues to compile resources to aid in understanding the impact of the pandemic on employers, their workforces and the management of risk.
Supply Chain & Business Risks
Mass Transit Challenges Lie Ahead
As America tentatively reopens, it is clear that one of the challenges facing a return to pre-pandemic ways of life and work will be transportation. In particular, mass transit faces a tough road to returning to full capacity. The CDC has said that commuting by car would reduce the possibility of becoming infected. Its suggestion that employers should encourage workers to avoid public transportation systems and ride sharing and reimburse their parking expenses has local elected officials and transit agencies raging. Unsurprisingly, the New York Times reported that one result of public fear over using mass transit systems could be gridlocked roads and highways.
Some potential solutions proposed by the Times include the following measures:
- Seat reservations on buses, subways and commuter trains
- Flexible bus routes for on-demand minibuses that would carry a smaller number of passengers going to the same general place at the same time
- Allowing the purchase of public transit tickets through ridesharing apps like Uber and Lyft
- Fold on-demand scooter and bike rentals into mass transit systems to encourage higher usage
These measures and other innovative thinking is needed to help mitigate another looming transportation problem – Amtrak’s announcement that it will cut up to 20 percent of its workforce. The move comes as ridership on Amtrak passenger trains have seen significant declines due to coronavirus. The company’s news comes just one month after it received $1 billion from the CARES Act.
Air travel could be complicated as well in the coming months as the TSA prepares to implement updated security measures to its screening process. By mid-June, the following measures will be rolled out across the nation, to limit physical contact and increase physical distance as much as possible:
- Passengers will retain possession of boarding passes instead of handing them to TSA officers and place them on readers themselves.
- Carry on food items will need to be placed into a clear plastic bag and then placed into a bin.
- Passengers will need to take extra care to ensure they do not have prohibited items such as liquids, gels or aerosols in quantities greater than 3.4 ounces in carry-on bags.
- TSA will allow one liquid hand sanitizer container, up to 12 ounces, per passenger in carry-on bags.
- Passengers will be required to maintain social distancing while going through the screening process.
- Travelers are encouraged to wear face protection. TSA officers will be wearing masks and gloves, the latter of which will be changed after each pat-down.
As consumers begin traveling again, one thing is certain – the experience will be different for some time.
Insurance Products & Coverage
Proposed Legislation Would Create a Federal Backstop for BI Claims
There has been much talk over the past month of the creation of a federal backstop for business interruption and event cancellation claims that occur because of a pandemic or public health emergency. Talk turned to action when Rep. Carolyn Maloney, D-N.Y. introduced legislation that would establish a federal pandemic risk reinsurance program.
The legislation, H.R. 7011, “the Pandemic Risk Insurance Act of 2020,” would be triggered when insurance industry losses exceed $250 million. An aggregate annual total would max out at $750 billion. Insurer participation in the program would not be mandatory.
The legislation comes in response to many small business owners who sought cover from insurance policies and were surprised to find they did not cover interruption caused by the current coronavirus pandemic.
A backstop is an important step in providing confidence to insurers to consider underwriting business interruption risk for small business owners. While the program would not apply to the current crisis, it would apply to pandemics occurring after January 1, 2021. A few details of the proposed legislation include the following:
- Covered public health emergencies would be certified by the Secretary of Health and Human Services
- The aggregate annual coverage cap would be $750 billion
- The definition of “Insurer” in the bill includes captives and self-insurance arrangements
Alternative legislation had been proposed by insurer industry associations that would have called for a similar program to be funded by taxpayers. Maloney indicated there was no movement for such legislation.
Under Maloney’s plan, the federal government would cover 95 percent of losses after a five percent deductible is met. H.R. 7011 is supported by many business and trade associations, as well as several large insurers. Participation in the plan is voluntary for insurers and no premiums are required to be charged by the government to participating insurers, which raises questions about how the Act will be funded.
One of the industries Maloney sought input from while drafting the legislation was the entertainment and live events industry. Interestingly, studios retain cover for losses incurred as a result of civil authorities, municipalities, states or national governments demanding the halting of production. Those policies were triggered when coronavirus caused governments to demand production be halted.
So many claims have been filed that the main carriers offering niche coverage for production studios could face claims of up to $1 billion. Insurers did not anticipate production delays from such circumstances extending beyond several days. The losses could extend to reinsurance that supports the carriers with contingency coverage.
While original claims are covered, since the advent of the shutdown, wording on new policies has been altered to exclude coronavirus, communicable diseases and viruses from covered events. This reality has stopped production, even in cities where lockdowns have been lifted.
Other trade associations supporting the legislation include the National Retail Federation, Nonprofit New York and the U.S. Travel Association.
Legislation and Litigation Roundup
The passage of another week has brought forth more legislation from city, county and state governmental bodies, as well as litigation. Here is a rundown of recent news stories of interest.
News of Note
- Salons, Gyms, Offices Require Coronavirus Waivers, Reuters, June 1
- Ohio House Passes Coronavirus Presumption, Liability, Business Insurance, May 29
- SEC Cracks Down on Coronavirus Misconduct, Reuters, May 26
- Some Premiums set to Double as Hard Market Sets In, Insurance Business, May 26
- U.S. Airports to Adopt Extra Security Measures by Mid-June, CBS News, May 25
- Virus Creates Unknown, Volatile Environment for Health Insurers, Boston Business Journal, May 25
- Insurers Eye Payment Recalibration as Coronavirus Fuels Shift to Telehealth and Testing, Yahoo Finance, May 25
HR & Employee Benefits Insights
I-9 Exceptions Extended by DHS
As companies continue to plan a way back to onsite work for their employees, the Department of Homeland Security (DHS) has extended form I-9 exceptions initialized in March to allow continued flexibility for employers. Recognizing that compliance with existing protocols remains difficult given the widespread remote working conditions still in place, U.S. Immigration and Customs Enforcement (ICE) extended its temporary flexibility provisions for an additional 30 days.
Until June 13, employers can continue to conduct I-9 document inspection electronically. As has been the case for the past two months, employers must still complete a physical examination of documents within three business days of any return to normal business operations.
DHS is continuing to allow expired List B identity documents as acceptable for verification of employment eligibility as long as those documents expired on or after March 1, 2020.
Employers are instructed to note “COVID-19” in the additional information field when given an expired document that is permitted under this temporary policy. Employers should be mindful that the acceptance of expired documents is temporary and that they will be required to update employees’ records with valid, unexpired identity documents within 90-days of the termination of the temporary policy.
Finally, employers who may receive Notices of Inspection (NOI) from ICE have an additional 30 days on top of an existing 60-day extension to prepare for the inspection as part of the DHS’ overall more flexible guidelines during the coronavirus crisis.
The extra 30-day allowance has been extended through June 18, 2020. Employers that have received NOIs should continue to be prepared to respond within the extended deadlines, which are a reflection of the public health crisis and not a change in official immigration policy.
Return to Work Update
Since our initial article outlining return to work guidelines in Issue 10, the CDC has issued a step-by-step blueprint on how to reopen places of business during the ongoing coronavirus epidemic. The sweeping guidelines specifically pertain to workers in office buildings and aim to outline the steps employers can take to create a safe and healthy workplace while protecting clients and workers.
The first piece of guidance the CDC offers is to create a coronavirus workplace health and safety plan based on its already-issued interim guidance for businesses and employers. Other, high level guidance includes the following recommended measures:
- Ensure the office building is ready for workers by checking and servicing necessary HVAC systems; increasing the circulation of outdoor air as much as possible (e.g., by opening doors and windows); and checking for hazards associated with prolonged facility shutdown (e.g., mold growth, pests, stagnant water).
- Identify where and how workers might be exposed to coronavirus at work by conducting a thorough hazard assessment; and identifying common areas where employees could come within six feet of each other (e.g., meeting rooms, break rooms, cafeterias).
- Develop hazard controls to reduce transmission of coronavirus among workers by developing temperature and symptom checks; keeping desks six feet apart or erecting plastic shields around desks that cannot be separated; staggering work shifts; avoiding public transportation if possible; posting signage around the office about the virus; creating one-way traffic flows; routinely cleaning all frequently touched surfaces; and wearing face coverings at all times.
- Educate employees and supervisors about steps they can take to protect themselves at work by providing communication and training that is easy to understand and is presented in preferred languages spoken or read by employees.
The CDC goes into greater detail on all of the above items on its site and provides resources to implement its guidance. These resources are important, not only because the undertaking is massive, but because one-third of workers in a recent survey say they would sue their employers if they believed they contracted coronavirus from a co-worker.
If implemented, the CDC’s guidelines will reshape the American office culture. Everything from the commute to the coffee in the breakroom could look different for many office workers. Some employers could review the guidance and decide the best thing for their workforce is to continue working remotely; others may forge ahead, hopefully as safely as possible.
For more resources about managing your return to work, contact your EPIC broker.
Insights From Across the Firm
EPIC’s thought leaders have written numerous articles on matters relating to coronavirus, all of which are available on EPIC’s website. Those articles include:
- Projecting Healthcare Costs – Not an Easy Assignment, June 4
- OSHA Revises Guidance for Recording COVID-19 Cases, June 4
- Coronavirus and Workplace Well-being: Staying Connected, June 1
- Patient-Centered Outcomes Research Institute (PCORI) Fee Payment Due July 31, June 1
- IRS Releases 2021 HAS and HDHP Limits, June 1
- Back to Work: Employee Testing and HIPAA, June 1
- COVID-19 and Consumer Privacy, May 28
- Web Shells: A Lurking Threat, May 28
- Second-Order Effects of COVID-19, May 26
- Determining Return to Work Protocols, May 22
Our understanding of coronavirus and its impact around the world continues to evolve at a rapid pace. This newsletter briefly touches on issues that businesses may want to consider as they approach their response to novel coronavirus. More topics will be considered in future issues as our understanding of the virus and its impact continues to evolve. Please reach out to your EPIC broker for more information.
For all of EPIC’s coronavirus coverage, visit epicbrokers.com/coronavirus
Disclaimer: This has been provided as an informational resource for EPIC clients and business partners. It is intended to provide general guidance on potential exposures and is not intended to provide medical advice or address medical concerns or specific risk circumstances. Due to the dynamic nature of infectious diseases, EPIC cannot be held liable for the guidance provided. We strongly encourage readers to seek additional safety, medical and epidemiological information from credible sources such as the Centers for Disease Control and Prevention and the World Health Organization. Regarding insurance coverage questions, whether coverage applies or a policy will respond to any risk or circumstance is subject to the specific terms and conditions of the policies and contracts at issue and underwriter determinations.
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