EPIC Risk Advisory Bulletin
Volume 1, Issue 23
In this issue, we take a focused look at:
- Supply Chain and Business Risks
- Transportation Deadlines Extended
- DHS Updates Master Question List for Coronavirus
- U.S. Outlines Sweeping Vaccine Plan
- Insurance Products and Coverage Information
- Business Interruption and the PRIA
- Presumptive Compensability Legislation
- News of Note
- Human Resources and Employee Benefits
- Return-to-Work Coronavirus Templates
- HHS Coronavirus Resources for LTC Facilities
- DOL Regulation Regarding Working Parents and Federal Leave
- Wage and Overtime Enforcement Suspended for Some Employers
The information presented here is intended to provide a high level overview of critical areas of concern for businesses around coronavirus. Consult your EPIC insurance broker for more in-depth guidance.
Supply Chain & Business Risks
Transportation Deadlines Extended
The Federal Motor Carrier Safety Association (FMCSA) has extended its most recent COVID-19 Emergency Declaration through December 31, 2020. The decision continues the exemption granted from Parts 390 through 399 of the Federal Motor Carrier Safety Regulations (FMCSRs).
In providing relief from FMCSRs for motor carriers and drivers, the extension allows emergency assistance for select supply chains and addresses national emergency conditions that create a need for immediate transportation of essential supplies.
It is important to note that regulatory relief is provided only to commercial motor vehicle operations providing direct assistance related to coronavirus and is limited to the transportation of:
- Livestock and livestock feed;
- Medical supplies and equipment related to the testing, diagnosis and treatment of coronavirus;
- Supplies and equipment necessary for community safety, sanitation, and prevention of community transmission of coronavirus such as masks, gloves, hand sanitizer, soap and disinfectants; and
- Food, paper products and other groceries for emergency restocking of distribution centers or stores.
Direct assistance does not include routine commercial deliveries, including mixed loads with a nominal quantity of qualifying emergency relief added to obtain the benefits of the emergency declaration.
It is important to note that the Emergency Declaration is not an exemption from the controlled substance and alcohol uses and testing requirement (Part 382), the commercial driver’s license requirements (Part 383), the financial responsibility (insurance) requirements (Part 387), the hazardous material regulations (Parts 100-180), applicable size and weight requirements, or any other portion of the regulations not specifically exempted under §390.23.
For additional information about this exemption or how it impacts your operations, please reach out to a member of the EPIC Transportation and Logistics team.
DHS Updates Master Question List for Coronavirus
The Department of Homeland Security (DHS) Science and Technology Directorate (S&T) has developed a Master Question List (MQL) intended to quickly present the current state of available information to decision makers in the operational response to coronavirus. It allows structured and scientifically guided discussions without the burden of needing to review scientific reports, and intends to prevent duplication of efforts by highlighting and coordinating research.
The MQL quickly summarizes what is known, what additional information is needed and who may be working to address such fundamental questions as, “What is the infectious dose?” and “How long does the virus persist in the environment?”
The information has been assembled and evaluated by experts from publicly available sources such as reports, articles in scientific and technical journals, selected internet sources, and media reports. It is intended to be a quick reference tool on the virus and addresses the following topics:
- How much of the virus will make a healthy person ill
- How the virus spreads form one host to another
- The incubation period of the virus and how long it lives in the environment
- The signs and symptoms of an infected person
- Protective immunity and PPE
- Clinical diagnosis, testing and medical treatments
- How to kill the virus
- Vaccines, pharmaceutical and non-pharmaceutical interventions
For more information about how to use this resource, contact an EPIC team member.
U.S. Outlines Sweeping Vaccine Plan
On September 16, the federal government outlined a sweeping plan to make vaccines for coronavirus available free for all Americans, when a safe and effective shot is established. The effectiveness of the plan hinges on the vaccine being widely accepted among Americans, but recent polls show many are skeptical of a coronavirus vaccine.
Federal health agencies and the Defense Department laid out complex plans for a vaccine campaign to begin in January or possibly as early as late 2020. Vaccinations would be given first to health workers, essential employees and people in vulnerable populations. Eventually, vaccinations would expand to the entire population.
While the Pentagon will control the distribution of the coronavirus vaccine, health workers will administer the shots. The CDC says the plan is larger in scope and more complex than seasonal flu shot campaigns or previous outbreak-related vaccination responses, such as to H1N1 more than a decade ago.
It is possible that people will need two doses of the vaccine, administered either two or four weeks apart. Double-dose vaccines must come from the same drug maker and there could be several vaccines from different manufacturers approved and available for distribution.
The vaccine will be free of charge to all Americans, as billions of dollars in taxpayer funding has been approved by Congress and allocated by the Trump administration for that purpose. Administration officials say they are working to ensure no one, including Medicare recipients and uninsured individuals, are charged for the administration of the vaccine.
This is an evolving story that may have already changed since this writing. EPIC will continue to monitor and provide updates.
Insurance Products & Coverage
Business Interruption and the PRIA
The coronavirus pandemic exposed a gap between business interruption (BI) insurance and the businesses thought to be covered by it. When government-mandated closures forced businesses to shut down, many were surprised to receive no aid from their BI policies. It has become clear through ongoing claims litigation that BI policies either exclude pandemic risks entirely, or require physical property damage to trigger coverage.
The permanent closure of 100,000 small businesses and rising strain on businesses across America prompted U.S. Rep. Maloney to introduce the Pandemic Risk Insurance Act (PRIA) back in May. The Act, which has been contested by industry groups, seeks to make pandemic BI policies affordable for all business owners and ward off a repeat of this year’s disastrous effects during future pandemics.
The PRIA has quietly been advancing and on September 14, Rep. Maloney held a virtual roundtable with insurance and industry representatives to discuss the bill. At that time, the bill appeared to have broad support from groups that include the National Association of Professional Insurance Agents (PIA), the Council of Insurance Agents and Brokers (CIAB), and the American Property Casualty Insurance Association (APCIA), as well as insurers to include Swiss Re Americas and Chubb.
Many in the industry argue that pandemic coverage is not possible without a federal backstop similar to the Terrorism Risk and Insurance Act (TRIA), which was passed after 9/11. The PRIA offers some advantages over other proposals from lawmakers advocating for mandates that exceed contractual, legal policy language and pay out billions of dollars for business losses. In contrast, PRIA is not retroactive and offers an immediate cash infusion to businesses rather than forcing them to endure a lengthy claims process before receiving aid.
Absent significant legislation like the PRIA being enacted, claims decisions will continue to be adjudicated in the courts, where results have been mixed. In the UK, a test case brought by Britain’s Financial Conduct Authority (FCA) to clarify insurance coverage for coronavirus-related BI claims was decided in favor of policyholders on a majority of key issues. The court determined that the pandemic and government’s response to it could be considered a single occurrence. It also made determinations on policy wording used in the test case.
Insurers were found liable for some of the 21 types of policy wording examined by the court. The majority of denial of access clauses related to localized events, and coronavirus was determined to be considered a countrywide event. Policy restrictions in terms of localization were therefore not applicable.
The case did not shed clarity on much of the litigation activity in the U.S., which has focused on whether coronavirus constitutes physical damage and is thus a covered peril. In New Jersey, a trial court denied an insurer’s motion to dismiss a coronavirus BI suit brought by a group of optometry practices, finding unsettled questions under state law about whether loss of a property’s functional use constitutes direct physical loss under a property policy.
As litigation continues in piecemeal fashion across the U.S., enactment of the PRIA could bring needed settlement and assurance on how BI policies will respond before another pandemic hits.
Presumptive Compensability Legislation
An ongoing issue affecting workers’ compensation is presumptive compensability legislation from states. At least 18 states have proposed workers’ compensation bills related to coronavirus, including an expansion of coverage for either frontline, essential or all workers. Some states have issued executive orders, bulletins, emergency rules and directives on workers’ compensation coverage for certain workers. It is a dynamic situation that warrants monitoring by employers.
The latest states to enact presumptive compensability legislation are California and New Jersey. On September 17, California Governor Newsom signed into law measures that will make it easier for front-line workers to receive workers’ compensation benefits when they contract coronavirus at work. The law, S.B. 1159, creates a presumption that first responders, health care workers and police officers testing positive for the virus within 14 days of working contracted the virus at work. Additionally, the legislation will require employers to promptly report potential coronavirus outbreaks to public health authorities. The law is effectively immediately and is set to expire on January 1, 2023.
In New Jersey, Governor Murphy signed S.B. 2380 into law on September 14. The legislation is similar to that of California, in that it amends the New Jersey Workers’ Compensation statute by creating a presumption of compensability for essential employees who contract coronavirus. In this situation, workers would receive benefits that include medical care, temporary disability benefits, permanent disability benefits and possibly dependency benefits should the employee die from the virus. The burden of proof shifts to employers to establish that the worker did not contract coronavirus in the workplace, which could be a tall task. The law is effective immediately and is retroactive to March 9, 2020.
Other states have passed or failed to pass similar legislation. On September 14, Ohio Governor Mike DeWine signed into law H.B. 606, legislation that protects businesses from lawsuits arising out of exposure to coronavirus in the workplace, as long as there has been no intentional misconduct. This legislation follows similar actions that have been taken in Georgia, Idaho, Nevada and Tennessee. H.B. 606 provides civil immunity to businesses, schools, health care providers and other entities from lawsuits arising from the exposure, transmission or contraction of the virus or its mutated forms, as long as no reckless, intentional or willful misconduct has been demonstrated.
An excellent resource for staying current on legislative activity is the National Council on Compensation Insurance (NCCI) site. NCCI is tracking state compensability presumption legislation and updates state statuses weekly. Access its coronavirus workers’ compensation compensability presumptions chart updated weekly with developments around state legislative activity.
Ogletree Deakins has assembled a searchable table to track which states have implemented or proposed amendments to state workers’ compensation statutes. Access the table, which also addresses workers’ compensation benefits for healthcare workers and first responders.
For more information, contact an EPIC team member.
News of Note
The passage of another two weeks has brought forth more developments across the insurance world. Here is a rundown of recent news stories of interest.
- U.S. Airports Seek Fiscal Band-Aid From Coronavirus with Bond Refundings, Reuters, Sept. 23
- U.S. FDA to Tighten Coronavirus Vaccine Authorization Standards Ahead of Election, Reuters, Sept. 22
- Business Interruption Battles Could Cut Demand for Insurance, S&P Global, Sept. 22
- More Than 40 Percent of U.S. School Employees are at High Risk for Severe COVID-19 Cases, an Analysis Finds, New York Times, Sept. 18
- Oregon OSHA Faults Employers for COVID-19 Protections, Business Insurance, Sept. 17
- How Companies are Getting Speedy Coronavirus Tests for Employees, New York Times, Sept. 16
- COVID-Induced Litigation Mounts for Retail Industry: Cases to Watch, Steptoe, Sept. 16
- Travelers Wins Another Coronavirus Ruling, Business Insurance, Sept. 15
- More Firms May be Exposed to D&O Suits Over Diversity, Business Insurance, Sept. 14
- Coronavirus Coverage Litigation: The ‘Physical Loss or Damage’ Battle Revs Up, Law dot com, Sept. 14
HR & Employee Benefits Insights
Return-to-Work Coronavirus Templates for Employers
The EPIC IMPACT Training & Awareness team has prepared a number of flyers and other templates for use in workplaces to communicate effectively about various items related to the coronavirus pandemic. These materials can be customized with your logo and may be helpful for employers planning their return to work processes and procedures.
- General Awareness – provides high level information on how to prevent the spread of the coronavirus, explains what it is and communicates symptoms in a visual way. English and Spanish versions are available.
- Benefits to Navigate COVID-19 – quickly shows employees how to access various benefits, including telehealth vendors, Employee Assistance Programs and more. English and Spanish versions are available.
- Care from Home – Telehealth & Mail Order Prescriptions – communicates the benefits of a telehealth and mail-order prescription program, helping employees understand when and why to use each.
- COVID-19 Assessment Template – shows in three simple steps what employees should do if they experience COVID-19 symptoms. English and Spanish versions are available.
- Health Care FSA, HSA What You Need to Know – communicates Flexible Spending Account (FSA) and Health Savings Account (HSA) updates to employees.
Please reach out to an EPIC team member to get more information.
HHS Releases Resources for Long-Term Care Facilities
The Department of Health and Human Services’ (HHS) Office of the Assistant Secretary for Preparedness and Response (ASPR) recently posted new and updated coronavirus resources for long-term care facilities and other health care organizations. The site contains many helpful documents and templates in the following categories:
- Coronavirus healthcare planning resource collections
- Official and governmental coronavirus websites
- ASPR TRACIE-developed coronavirus-specific resources
- ASPR TRACIE-developed related infectious disease resources
- ASPR TRACIE topic collections
If you have questions or need additional information, contact an EPIC broker.
DOL Regulation Regarding Working Parents and Federal Leave
Working parents whose children are in and out of school due to hybrid learning schedules do not need an employers’ authorization to take federal leave, according to a Department of Labor (DOL) regulation that took effect September 16.
The DOL revised its leave rule after a federal court decision on August 3 struck down some of its parts. One of the parts that was nullified was a requirement for employees to obtain employer authorization to leave to care for a child whose school is closed due to coronavirus.
Uncertainty remains, however, as the rule continues to state that employees must gain approval from employers for ‘intermittent paid leave.’ It is unclear as to what constitutes intermittent paid leave.
Under the provisions of the Families First Coronavirus Response Act (FFCRA), employers with fewer than 500 workers are required to provide two weeks of paid sick leave to employees unable to work because of the pandemic. Companies must also offer up to ten weeks of partially paid leave under the expanded Family and Medical Leave Act (FMLA) coverage for employees to care for children. In force through the end of the year, it is not known whether caring for a child in a hybrid learning environment falls within these provisions.
Additional court challenges in New York, home to the nation’s largest school district, could be forthcoming in order to provide clear direction for employers and employees. Beyond the leave issue, the DOL said that its recent revisions to the rule:
- Provide direction for administration of the Emergency Paid Sick Leave Act (EPSLA)
- Offer guidance for the effective administration of the Emergency Family and Medical Leave Expansion Act (EFMLEA)
- Deliver guidance to the regulated community as they implement statutory requirements
For more information about the DOL’s revised ruling as well as the various leave laws and how they may impact your organization, contact an EPIC team member.
Wage and Overtime Enforcement Suspended for Some Employers
On September 15, the Wage and Hour Division of the U.S. Department of Labor (DOL) released a bulletin stating that it was suspending enforcement of minimum wage and overtime laws for amusement and recreational employers whose operations were affected by the coronavirus pandemic.
Businesses that were subject to a Fair Labor Standard Act (FLSA) exemption before 2020, for seasonal employees providing recreational or amusement services, will not face federal enforcement actions over allegations that they are no longer eligible for the exemption because of curtailed operations caused by the virus. The DOL’s ruling indicates employers that were exempt from minimum wage and overtime laws before the onset of the pandemic will remain so now.
For more information about how this ruling may impact your organization, contact an EPIC team member.
Insights From Across the Firm
EPIC thought leaders have written numerous articles on matters relating to coronavirus, all of which are available on EPIC’s website. The most recent articles include:
- Diving Into Health Plan Tobacco Programming, September 21
- Coronavirus has Worsened the Mental Health Crisis, September 18
- Attacking Out-of-Network Again, September 15
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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