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(c) 2020 Jon L Gelman, All Rights Reserved.

Wednesday, May 13, 2020

A Federal Heroes Compensation Fund

The COVID-19 pandemic has the potential of generating an enormous number of occupational illness claims from health care workers [HCW] and first responders [FR]. Several governmental leaders have called for a nationalized workers’ compensation benefit program to handle the surge of claims. 


The ability of the patchwork of individualized state programs to handle the potential monumental surge of claims has come into question. The efficiency and effectiveness of a multitude of non-integrated and stand-alone schemes of workers’ compensation will be challenging. The fractionalized handling by multiple jurisdictions will produce an inconsistent and erratic benefit delivery solution that will impact the strategy to provide the best public health initiative nationally to cope with the COVID pandemic.


Federal Government Will Provide a Uniform Program

Typical federal benefits provide a uniform national solution. Issues as to exposure and casual relationship can be standardized across all claims. Fiscal stability of the states and insurance companies can be obtained through federal administration and financing of both administration and delivery, without regard to state budgets and insurance carrier premium dollars. Integration with collateral benefit programs such as Medicare and Medicaid can be fashioned in an integrated solution. State unemployment, pension and supplemental benefits can be applied, setoff and recovered on a common basis thorough a nationalized central Federal agency management.


State Programs Stressed

The state workers compensation structure will be seriously stressed to handle the growing number of potential claims. HCW and FR are experiencing increased rates of COVID-19 illness and fatalities. The workers are fulfilling their heroic frontline roll in the battle against the disease and enduring enhanced risk that threaten: themselves, their families, health care facilities and the community at large.

Workers’ compensation insurance carriers are not prepared for these unanticipated catastrophic losses. Premium coverage for this type of “once in an 100 year event” has not been calculated into the rates. The losses are not backstopped by other revenue sources. The economic consequences to the already monetarily and administratively challenged state budgets could be severe and could result in state and local public and private entity bankruptcy. States are already overwhelmed in processing unemployment benefits.

The fractionalized state programs are not equipped to handle the adjudication and administration of the exponential volume of potential claims and multitude of complicated legal issues. Legal jurisdictional issues over state-wide partnerships alone will lead to complicated and prolonged litigation. 

As states and other local public entities enlist armies of volunteers from all over the nation, to go to specific epicenters of disease, questions over jurisdiction will arise. The extra-territorial and intra-territorial claims involve complex legal issues that will require duplicative litigation efforts. Additionally, the benefit programs throughout the United States are not equal and will create a wide disparity of benefits. Volunteers may choose to work in a jurisdiction offering the best benefit package instead of where the actual need exists for trained staff.


Federal Government Has Done This Before

In the past the federal government has stepped up to the plate and similar fact situations and helpful and has provided a uniform federally-based workers compensation program that can't be managed in a uniform, efficient, equitable and summary nature.

Examples of the programs are: James Zadroga 9/11 Health and Compensation Reauthorization Act; James Zadroga 9/11 Health and Compensation Act of 2010; Ray Pfeifer, and Luis Alvarez Permanent Authorization of the September 11th Victim Compensation Fund Act; Smallpox Emergency Personnel Protection Act of 2003 [SEPPA]; and Energy Employees Occupational Illness Compensation Program Act of 2000.



NY Governor Andrew Cuomo has called for a COVID-19 fund to compensate frontline workers of he pandemic. He said, “U. S. Senator Chuck Schumer (D-NY) unveiled, a COVID-19 “Heroes Fund,” proposal to reward, retain, and recruit essential workers. The Schumer-led, proposed “Heroes Fund” consists of two major components: a $25,000 premium pay increase for essential workers, equivalent to a raise of $13 per hour from the start of the public health emergency until December 31, 2020, and a $15,000 essential worker recruitment incentive to attract and secure the workforce needed to fight the public health crisis.

NY Governor Andrew Cuomo said, “All those essential workers have to get up every morning to put food on the shelves and go to the hospitals to provide health care under extraordinary circumstances.” He urged the Federal government to pay frontline workers “hazard pay” for risking their lives while working during the COVID-19 pandemic. “This crisis is not over yet, and as long as these workers continue to work and expose themselves to the virus, they should be properly compensated.”

US Senator Chuck Schumer stated, “And this proposed ‘Heroes Fund’ would provide premium pay to these essential workers—the doctors and nurses, grocery store workers, transit workers, and more who are central to fighting this crisis—and would establish an incentive system to retain and recruit the workforce needed for the long months to come. Essential frontline workers sacrifice daily for our collective health and well-being, and I, along with my colleagues, are fully committed to supplying these heroes the financial support they deserve.”

NJ Governor Philip Murphy endorsed The HEROES Act, “For months now, we have been calling on the federal government to provide much-needed relief to state governments. The HEROES Act, unveiled today by Speaker Pelosi and House leadership, is critical to ensuring that our police officers, educators, firefighters, EMTs, first responders, and other essential government workers are able to remain on the job and continue saving lives."

Healthcare workers and first responders are the soldiers in the war against the covert epidemic. The nation should meet its legal and moral responsibility to adequately compensate them for injuries occurring in their efforts to defeat the virus. Congress should draft and immediately create a federal workers' compensation fund that will provide adequate benefits in an efficient and remedial nature to the nation's healthcare workers and first responders. The President should support this effort, to help the "soldiers and the war for the Nations health,” and sign Federal legislation to assist these individuals who have fought so hard to save the nation.

As the first wave of the pandemic continues to surge across the nation and world, it is incumbent upon the Congress to insure the existence of an adequate and uniform benefit program is in place.The battle against COVID-19 will be long and tedious. The nation must provide a uniform, remedial and efficient benefit program to protect our HCWs and FRs and protect their families. This is a national effort and should not put one state conflicting against another. The time for Congress to enact a Federal Heroes Compensation Fund is now.
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Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thomson-Reuters). For over 4 decades the Law Offices of Jon L Gelman 1.973.696.7900 jon@gelmans.com has been representing injured workers and their families who have suffered occupational accidents and illnesses.

Blog: Workers ' Compensation
Twitter: jongelman
LinkedIn: JonGelman
LinkedIn Group: Injured Workers Law & Advocacy Group
Author: "Workers' Compensation Law" West-Thomson-Reuters

Updated: 5/13/2020