SIRA Standard of practice in response to COVID-19: submission summary

Introduction

The State Insurance Regulatory Authority (SIRA) commenced public consultation on SIRA’s new Standard of practice in response to COVID-19 (Coronavirus) from 7 to 18 May 2020.

The consultation draft of the COVID-19 related Standard of practice (Standard 32) was informed through early feedback from key stakeholders.

In addition to discussion and engagement with numerous stakeholders, seven written submissions were received in response to the call for public consultation. The following provides a summary of the feedback received throughout the course of public consultation.

Amendments to the legislation

The COVID-19 Legislation Amendment (Emergency Measures – Miscellaneous) Act 2020 commenced on 14 May 2020. The Act makes amendments to the Workers Compensation Act 1987 (1987 Act) to introduce a presumption that workers who contract COVID-19 while working in prescribed employment have contracted COVID-19 in the course of their employment.

SIRA is carefully considering the amendments and will work closely with the Government and stakeholders to implement the changes, including preparing the supporting Regulation.

Further refinements to the COVID-19 Standard of practice in response to the legislative changes are also under consideration.

SIRA will continue its COVID-19 program of adapting SIRA policies, guidance and support as required in consultation with stakeholders.

General

There was general support for the intent of the COVID-19 Standard of practice and the claims handling principle that ‘Insurers will be flexible and adaptable during the COVID-19 pandemic and ensure that claims are managed with empathy and transparency, making liability decisions and paying entitlements without delay’.

There was also support for SIRA publishing the Standards of practice with the intent of improving the way in which claims are managed and the overall efficiency of the workers compensation system.

The need for flexibility and adaptability in the current environment was highlighted, noting that claim numbers could increase and potential clusters could emerge.

It was recognised that parts of the Standard would require review considering the recent legislative changes which establish presumptive rights for workers in prescribed employment.

A desire to minimise regulatory burden was evident, particularly in the current environment where many employers are experiencing financial distress. Further, the operational impact for insurers to implement any changes was identified, with the need to balance the current impact of the pandemic on insurer resourcing.

Some stakeholders expressed the view that the Standard of practice is not necessary and may not achieve the desired outcomes for workers and employers. Some feedback raised the potential for perceived inequity and fairness between workers who contract COVID-19 and other workers in the system.

32.1 Initial contact

There was some support for the intent of encouraging early contact as soon as possible after injury notification. Further, some insurers expressed the view that this was already consistent with their normal claims management practice.

Some stakeholders expressed the view that the existing timeframes are appropriate and there should be a consistent approach for all injury types. It was noted that many insurer systems, policies and procedures are aligned to the current legislative timeframes and may require amendment if the proposed timeframes are established.

32.2 Provisional acceptance of liability

There was support for the policy rationale that workers at a higher risk of exposure, and who are protecting the community, should be promptly supported by having the claim provisionally accepted.

A commonly expressed view was that all workers should be treated equally, irrespective of the injury or the diagnosis. Further, the existing legislated timeframes are appropriate and establishing different timeframes for COVID-19 claims would be difficult to administer as insurer systems, policies and procedures align to existing legislative timeframes.

It was recognised that the recent legislative amendments establish presumptive rights and that these statutory provisions are sufficient to protect workers who contract COVID-19 in the workplace. The inclusion of an additional requirement would create additional operational burdens for insurers and may result in limited improvement to customer outcomes.

32.3 Full liability decision

There was general agreement that liability decisions should be made where there is sufficient evidence available to establish the worker contracted COVID-19, and that work is the main or substantial contributing factor.

Some stakeholders expressed ongoing concerns about the way in which liability decisions are currently made by insurers, and the limited detail being provided to support the decision. The importance of the insurer clearly setting out the reasons for a decision, together with a description of the information relied upon, was highlighted.

32.4 JobKeeper Scheme

Key themes emerged from the discussion and feedback in relation to JobKeeper payments, including the inherent complexity, operational challenges to implement changes, and the need to ensure regular and transparent communication.

Interaction between the schemes

The interaction of JobKeeper payments with workers compensation entitlements is complex. Information has been made available to system participants; however, it was identified that further information and the collective understanding across the system continues to emerge and evolve. Further work is being undertaken by insurers to assist with customers’ understanding of the impact and interaction of JobKeeper payments on entitlements.

Operational and implementation challenges

The cost and benefit of any changes to claims handling processes needs to be considered against the short-term nature of the JobKeeper program. While the JobKeeper payment will impact entitlements for a defined period of time, insurers identified a number of operational challenges. One stakeholder expressed the view that the requirement to actively identify affected claims was onerous. Further, the need to provide written notice to all impacted workers would be particularly difficult in a short period of time.

Transparent and timely communication

The importance of all relevant parties being kept informed regarding JobKeeper payments was also recognised. In particular, ensuring all parties are aware of any change in circumstances as this may have important implications. The frequency of contact was raised, with one stakeholder suggesting that as JobKeeper payments are based on a fortnightly claims process contact with the worker and employer should likewise be on a fortnightly basis.

32.5 Weekly payments

There was support for the intent to ensure workers continue to receive weekly payment entitlements without delay or interruption. It was recognised that relevant information has also been made available on both SIRA and icare websites to help system participants and customers understand the changes.

32.6 Weekly payments in advance

The intent of this Standard was for the most part supported. Some insurers have provisions in place which already allow for weekly payments in advance to be considered on a case-by-case basis.

One stakeholder opposed the Standard on the basis that it does not align to the legislative intent that all reasonable efforts be made for the employer to provide suitable work, and for the worker to return to work. It was considered that this approach does not provide flexibility in the event that interactions with JobKeeper payments have unforeseen impacts on future compensation payable to the worker.

32.7 Treatment

It was generally agreed that, where appropriate, workers should be advised of available options to engage in treatment using alternate means.

Feedback was received on the interpretation of the Standard, with the preference that communication be tailored to suit the individual worker’s circumstances and occur through normal claims management rather than mass communication to all workers.

32.8 Recovery at work support

There was support that a best practice approach to claims management would ensure workers are advised of their options for accessing SIRA funded programs. As above, the preference for individually tailored communication was raised, to occur as part of normal claims management rather than mass communication to all workers.

Feedback recommended the Standard also require the insurer to proactively contact the employer as well as the worker. It was also suggested that clarity be provided regarding what is meant by ‘services’.

32.9 Independent consultants, work capacity assessments

There was general agreement on the intent of this standard, with some insurers already having processes in place to consider referrals on a case-by-case basis, with transparent communication to ensure the most appropriate time, method and medium.

Some stakeholders noted the importance of ensuring employers are kept informed of upcoming assessments, examinations and their results so the employer can manage its statutory obligations, including supporting a worker’s return to work.

Some stakeholders also raised concerns regarding an insurer’s capacity to ensure the provider has appropriate preventative measures for face-to-face examination. This is already appropriately managed through relevant health registration and safety bodies.

The potential increase in cost of travel was also raised.

32.10 Independent medical examinations and assessments of permanent impairment

On 7 May 2020, SIRA issued guidance on Independent Medical Examinations and reports during the COVID-19 pandemic. Some stakeholders questioned whether the standard was still required in light of the updated guidance.

As above, some stakeholders noted the importance of ensuring employers are kept informed of upcoming examinations, and some raised concerns regarding an insurers capacity to ensure the provider has appropriate preventative measures in place. The potential increase in the cost of travel was also raised.

Revised Standard of Practice

Submissions and feedback on the consultation have been considered by SIRA, alongside refinements that are required following the commencement of the presumptions that apply to prescribed employment. The final Standard of practice in relation to COVID-19 is now available, and will commence from 26 June 2020.