Oregon’s workers compensation system has a problem that was exposed as never before by the COVID-19 pandemic, says United Food & Commercial Workers Local 555, which represents grocery and meatpacking workers. The problem is that privately-insured and self-insured employers are rejecting worker comp claims at a greater rate than the state-chartered non-profit State Accident Insurance Fund (SAIF). That was especially true for COVID-19-related workers comp claims.
In the United States, employers must insure workers in the event of on-the-job injuries and illnesses, and in Oregon they have three options: state-chartered non-profit State Accident Insurance Fund (SAIF), one of over 400 private insurance companies like AIG and State Farm, or self-insurance. To be self-insured for workers comp means an employer handles, and pays for, workers compensation claims themselves, either hiring its own claims examiners or hiring a third-party service provider to evaluate claims. Employers also sometimes pool together for group self-insurance.
Under Oregon law, self-insured employers and private workers comp insurance companies are supposed to evaluate claims the same way SAIF does. But in practice, the COVID-19 claim acceptance numbers told a different story, says Mike Selvaggio, a contract lobbyist representing UFCW Local 555.
From March 2020 to March 2022, Oregon’s Department of Consumer and Business Services (DCBS) reported 5,839 workers comp claims stemming from COVID-19 exposure or illness. SAIF approved 86.3% of its 4,232 total claims. Self-insured employers accepted 63.7% of 853 claims. And private insurers accepted 58.8% of 754 claims.
Selvaggio thinks the pandemic showed differences more clearly because it’s easier for an employer to argue a worker was exposed to COVID-19 off the job than to argue that a physical injury occurred off the job.
And compared to non-profit SAIF, self-insured employers and private insurance companies have greater incentive to keep costs down.
“Those gaps became very stark and impossible to ignore,” Selvaggio said.
To fix the disparity, UFCW called for legislation. In the 2021 legislative session, State Senator Chris Gorsek of Troutdale introduced a bill that would have required self-insured businesses to use SAIF to process their workers’ comp claims. UFCW argued that would bring claim acceptance rates up, but the proposal failed to advance.
“We want to make sure that they’re all being treated the same,” Gorsek told the Labor Press.
It was opposed by numerous employers that have private workers comp insurance or are self-insured. Sedgwick, the contractor self-insured Fred Meyer employs to adjudicate its claims, said Local 555’s numbers don’t tell the whole story, because employers don’t report when they accept non-disabling claims, only when they reject them, and most COVID claims were non-disabling.
But Selvaggio said if anything, the real numbers are worse.
“Many workers, fully aware of the challenges of proving an employment-related contagion, choose not to file claims at all, either because they are accessing their health care coverage instead, because they are using accrued paid time off in order to stay home, because they have been paid not to file a claim by their employer, or a combination of these factors,” Selvaggio testified.
Sedgwick also disagreed that SAIF, private insurance and self-insurance should theoretically arrive at similar rates of claim acceptance.
For UFCW, it’s a big issue, because unionized grocery chains like Fred Meyer and Safeway are self-insured, and grocery workers come in contact with the public every day at work. When their workers comp claims for COVID are denied, the union health trust is left to pay medical costs for workers who contracted COVID.
Gorsek plans to revisit the issue in the 2023 long session, at least to begin a more in-depth study of the problem.
