All NSW employers and insurers would contribute to the cost of COVID-19-related workers’ compensation claims under a cost-sharing model being considered by the State Insurance Regulatory Authority (SIRA).
The mechanism would enable the cost of COVID-19 claims to be shared across the widest possible base, rather than individual employers and insurers bearing a variable and uncertain amount of risk.
Amendments to the Workers Compensation Act 1987 that commenced in May 2020 introduced a rebuttable presumption that workers in “prescribed employment” who contract COVID-19 contracted the virus in the course of their employment.
These legislative amendments established new powers enabling the regulations to make provision in relation to the sharing of financial risk arising out of COVID-19 between all insurers.
The proposed cost-sharing mechanism would therefore enable certain COVID-19 claims costs to be redistributed in a way that reflects the scale and nature of each insurer’s NSW workers compensation business. It is anticipated that these costs will largely be passed on through employer premiums.
SIRA says the likely impact of COVID-19 claims on the workers’ compensation scheme is uncertain, largely because future claims volumes and costs are difficult to predict at this point in time.
“If claims volumes are high, costs to the scheme may be significant. The uncertain long-term health impacts of COVID-19, an understanding of which is still emerging, also make it difficult to estimate the ultimate cost of COVID-19 claims.”
SIRA noted that there are existing precedents for specific risks being managed at a whole-of-scheme level in this manner.
“For example, all insurers in NSW contribute to the cost of claims from workers who contract a dust disease at work; and, while it has never been deployed, workers’ compensation law makes provision for the cost of claims arising from an act of terror to be managed at a scheme-level.”
Feedback is being sought on the consultation paper until Friday 18 December 2020. Comments can be made here.
Mitchell Services Case Study
The following video demonstrates how myosh worked closely with the team at Mitchell to improve safety in their organisation by simplifying key processes and workflows, and providing a system that can be used in a variety of working environments both remote and offline. As a result, myosh is used at all levels in the organisation – from the Drill crews in the field all the way up to the CEO.