Senate Finance and Appropriations Committee changes to workers’ compensation presumption legislation largely address fiscal concerns

February 4, 2021

As previously reported, several pieces of legislation that propose changes to the Virginia’s Workers’ Compensation Act with potentially significant impact to local governments are making their way through the General Assembly. Over the course of two days, the Senate Finance and Appropriations Committee heeded testimony from VACo and adopted substitute language that significantly reduces the fiscal impact to local governments. The amendment establishes a presumption for COVID-19 for certain categories of public employees.

On February 2, the Committee considered SB 1342 (Vogel), which establishes a presumption that COVID-19 causing the death or disability of firefighters, EMS personnel, law-enforcement officers, and correctional officers is an occupational disease compensable under the Workers’ Compensation Act. The Committee also considered SB 1375 (Saslaw), which establishes a retroactive presumption for COVID-19 limited to firefighters and EMS personnel. VACo staff expressed concerns that an expansion of workers’ compensation presumptions for COVID-19, in addition to other recent changes last year in the benefits program, could result in substantial fiscal impacts to state and local governments at a time when they are struggling to provide essential and expanded services to respond to the impacts of the pandemic. According to actuarial analysis provided to VACo by VACORP, the fiscal impact of these bills as originally written could be approximately $15 million and nearly $4 million, respectively, if enacted.

This fiscal impact would stem mainly from language in the bills that would retroactively expand presumptions to March 2020. This has been identified as containing the most liability costs to local governments and well as posing complications to existing risk insurance reinsurance contracts and the likely delay in adjudication of workers’ compensation claims by impacted employees should the legislation be enacted. For these reasons, VACo staff urged the committee to consider the use of federal funding if the General Assembly wished to create this retroactive presumption.

The Committee first incorporated SB 1342 into SB 1375, and then adopted substitute language, which establishes a prospective presumption for COVID-19 for firefighters, EMS personnel, law-enforcement officers, and correctional officers effective July 1, 2021, removes the retroactive presumption language, and requires diagnosis of COVID-19 from a licensed physician, after either a presumptive positive test or a laboratory confirmed test for COVID-19, and presented with signs and symptoms of COVID-19 that required medical treatment. With these changes, there is still likely to be some fiscal impact to local governments if the bill is enacted, however, it is now likely to be substantially less without the retroactivity component. As a result, VACo no longer has opposition to the bill as written and is appreciative of the efforts of the patrons as well as the Chair and members of the Senate Finance and Appropriations Committee for addressing the majority of our concerns. SB 1375 reported with the substitute language from the Committee unanimously, 16-0, and now heads to the full Senate.

In the House, HB 2207 (Jones), which still has the original problematic language previously contained in SB 1342, was reported by the House Appropriations Committee unanimously, 22-0. VACo staff testified in opposition to the bill when it was heard in subcommittee and now urges that the bill be conformed to the new language adopted by the Senate Finance and Appropriations Committee.

Though both the House and Senate versions of these bills have yet to pass their respective chambers, VACo anticipates that they will do so and as a result of the differences between the bills, will likely end up in a committee of conference.

VACo Contact: Jeremy R. Bennett

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