Last week I addressed how Covid-19 may spawn 'claims' from the employees of Small Businesses and thereby impact the Workers' Compensation System. Today I want to address how some of the aspects that Covid-19 related impacts upon workers' compensation can effect the small business community itself.
Many small businesses have already had to either lay-off or furlough employees because even though the Congress and President recent approved the $2.2-trillion Emergency Coronavirus Spending Bill which provides a Paycheck Protection Plan designed to provide loans to keep small businesses afloat and allow them to pay their employees for up to 8 weeks (at essentially no cost since SBA will 'forgive such payroll costs'), the employees were already standing in the unemployment line by the time the Senate and House finished bantering over the specifics for three weeks. For more information about SBA Coronavirus Assistance see this official website.You can obtain more information or apply for these loans at most of your local FDIC Insured Banks, or you can go to this Official SBA Website to apply for Coronavirus (Covid-19) Economic Injury Disaster Loans.
While you may not be thinking about it now, just remember... the significant decline in your payroll should equate to a significant reduction in your corresponding workers' compensation premiums. If you are using a 'pay-as-you-go' premium system you will see that change immediately, if not then you should be talking to your Workers' Comp. Insurance Carrier about the significant decline in employment (even if temporary) and what that should mean in the way of a premium reduction and/or refund if you pay in advance.
Of course, if you had any employees file claims related to Covid-19, then there will be the challenge of your Insurance Carrier and their Claims Administrator processing those claims and handling them appropriately even in light of the current status of your business operations. You should also anticipate the potential impact any such claim(s) may have upon your 'experience modification factor' in a future premium period (year) even though it is too soon to tell if such claims will have a bigger impact upon the Workers' Compensation Insurance industry as a whole. Chances are a single claim against your SMB, especially one that might result in a death, could have a significantly higher experience factor impact then any other job-related claim you have ever previously encountered.
So again, the best answer I have for you is to stay regularly in touch with your local agent who is the go between with your Workers' Compensation Insurance Carrier. We many times think of Insurance Agents as being 'the Company's man', but in reality they are equally there to represent you... they have an 'agency responsibility' and if you ask them to "make an inquiry on your behalf" that is exactly what they are charged with doing... representing your interest to the the Company they are dealing with.
By the way, all my best to you, and your employees during this challenging time. Take care, and be safe!
Murph