SOME BUSINESSES are finding fewer insurers willing to write their policies for certain types of coverage that are seeing rapidly rising claims costs, particularly in liability lines as well as property insurance in areas with exposure to natural catastrophes.
When no insurers that are licensed in your state are willing to write a policy, we as your agent have to go to another market made up of insurance companies that are not licensed or regulated by the state.
It’s called the surplus lines (or “non-admitted”) market, and it can be a valuable alternative for insurance buyers.
As insurers get more selective writing some risks, it’s important for you as an insurance buyer to understand this market.
As mentioned, a significant percentage of COVID-19 workers’ compensation claims have been rejected. For example:
- In California, which has a law that extends the presumption that a case was contracted at work for anybody working on-site, 26% of the 93,470 COVID-19 claims filed in 2020 were denied In Texas, which has no presumption for COVID-19, 45% of the 32,000 related workers’ comp claims were denied, despite those workers testing positive.
- In Florida, which has given front-line workers who are state employees a presumption of eligibility, 22% of state employees’ coronavirus-related workers’ comp claims were denied last year, compared to 56% of cases for workers in the private sector. The NCCI also noted that fewer than 2% of COVID-19 workers’ compensation claims cost more than $10,000.
Payouts lower than expected
Another factor is that even COVID-19 claims that were accepted, often did not end up costing the insurers as much as they expected to pay out because the majority of infected workers did not require any hospital stays or treatment.
Insurers also say that many claims were likely never reported in the first place, particularly when workers had mild or no symptoms.
THE NOTICES MUST INCLUDE:
- Notification of the availability of subsidies.
- A description of their right to the subsidy and conditions.
- The forms necessary to establish eligibility.
- A description of the special election period.
- A description of the qualified beneficiary’s obligation to notify the plan when they are no longer eligible for coverage.
- Contact information of the plan administrator or contact.
Important: The Department of Labor has model language for the notices on its website.
What you should do
If your firm is large enough to be covered by COBRA, you should:
- Coordinate with your administrator to ensure that you agree about who should identify eligible individuals and who will be sending out notifications.
- If that is you, identify those individuals who may be eligible for the COBRA subsidy and who may be eligible to make a new election.
- Prepare notification documents.
- Notify all eligible individuals.