On August 20, legislation that proposes adding COVID-19 to the list of illnesses presumed to be incurred in the course of employment for multiple categories of first responders and health care workers has been reported and referred from the Senate Commerce and Labor Committee to Senate Finance with a substitute by a vote of 12-3. The legislation has potentially significant negative fiscal impact to local governments.
SB 5066 (Saslaw) adds COVID-19 to the list of existing conditions currently presumed be an occupational disease suffered in the line of duty for firefighters, law-enforcement officers, first responders, and health care providers and therefore covered by the Virginia Workers’ Compensation Act. This presumption would retroactively be effective to January 1, 2020. Several identical or similar bills – SB 5022 (Kiggans), SB 5097 (Vogel), SB 5104 (Deeds) – were incorporated into SB 5066. Senator Bell moved that Department of Correction officers also be included in the list of employee categories covered by the presumption. In the House, HB 5028 (Jones) has been introduced, which in addition to adding presumptions for first responders, also includes school board employees. HB 5028 has not yet been referred to a committee, but will likely be heard by the House Labor and Commerce Committee.
Though the intent of any potential legislation may be well-meaning, an expansion of workers’ compensation presumptions for COVID-19 in addition to other recent changes in the benefits program could result in substantial fiscal impacts to state and local governments at a time in which county governments are struggling to provide essential and expanded services in the midst of declining revenues and increased constituent needs. Generally, workers’ compensation does not cover community-spread illnesses like a cold or the flu because they usually cannot be directly tied to the workplace. As such, any expansion of coverage to include COVID-19 would be unexpected.
According to actuarial data and analysis provided to VACo by VACORP, the resulting fiscal impacts to state and local governments could be very large. Preliminary analysis estimates a multimillion-dollar fiscal impact to state and local governments to expand presumptions to first responders and a significantly larger figure to do so for school board employees. This includes a $20-$25 million fiscal impact for expanding presumptions for first responders and a $60-$70 million fiscal impact for expanding presumptions to school board employees. This is in part due to the potentially unknown latent effects of COVID-19, which may include lifetime side effects that would need to be treated under a lifetime workers’ compensation medical award.
This is especially true for any legislation that would retroactively expand presumptions. Local governments and risk insurance providers have not budgeted for an expansion of liability to cover additional presumptions related to COVID-19. Retroactively extending the provisions of legislation to the start of the pandemic would compound the fiscal strains asked of local governments to comply with these requirements. Not only would local governments feel immediate fiscal impact from these proposed expansions, but the Commonwealth would also be impacted through Line of Duty Act (LODA) costs and through increases of Basic Aid in the next Standards of Quality rebenchmarking.
Advocacy during a special session in which the General Assembly meets remotely or has limited in-person access poses unique challenges. In advance of committee meetings, VACo sent a letter to members of the House Labor and Commerce Committee, Senate Commerce and Labor Committee, and House Appropriations Committee, and Senate Finance and Appropriations Committee. VACo staff also testified remotely at the August 20 meeting.
We encourage you to contact your representatives to share your concerns regarding the fiscal impacts of these bills. VACo strongly urges that passage of any legislation that expands presumptions to include COVID-19 be done only if in concert with additional state funding assistance to local governments to offset additional costs through risk insurance.
VACo Contact: Jeremy R. Bennett