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Prejudgment interest legislation causing controversy for Illinois lawmakers - Helmsman

Prejudgment interest legislation causing controversy for Illinois lawmakers

Generally, U.S. courts apply the common law rule that prejudgment interest is not available in tort actions in the absence of a statute or court rule. While Illinois does not currently recognize prejudgment interest, that was threatened to change if legislation (HB 3360[i] as amended by Senate Floor Amendment 1[ii]) was signed by Governor Pritzker.

The original measure, advanced by the Illinois Trial Lawyers Association (ITLA) in early January, would change how interest is calculated for personal injury and wrongful death lawsuits. Most often, these personal injury cases are brought against a wide range of businesses, including healthcare, manufacturing, retailers, insurers, hotels, and airlines. As a result, the proposal would allow plaintiffs to recover 9 percent annual prejudgment interest in any personal injury lawsuit or arbitration where damages are awarded — this applies to economic and noneconomic damage awards alike.

Proponents of the legislation argue that it would only apply to a fraction of cases because 97 percent of civil cases reach a settlement. ITLA claims having this law would encourage settlements, lessen the burden on the court system, and save taxpayers money. According to one news report, the ITLA president has claimed “deep-pocketed defendants often ‘drag out’ cases to wear down injured patients who may not be able to afford” necessary medical treatment.

Opponents argue that the “notice” requirement triggering the interest is vague, undefined, and will introduce uncertainty into the system. They contend that the interest rate is high or out of step with states that allow prejudgment interest, and that noneconomic damages are generally excluded from any interest calculation.

Cries to veto HB3360 grew too loud to ignore.

Over the last few months, efforts against the legislation quickly materialized and continue to grow. Illinois trade groups, including the Manufacturers’ Association, the Retail Merchants Association, State Medical Society, Health and Hospital Association, and Chicagoland Chamber of Commerce, have been holding editorial board meetings to voice their opposition[iii]. The Chamber indicated that the bill would “saddle employers already reeling from the pandemic with more costs.”[iv]

Lawmakers are also weighing in on the controversial topic — State Representative and House Republican Leader Jim Durkin penned a plea to the governor, voicing opposition to the bill.

You can read his full letter here.

Gubernatorial action

The measure was sent to Governor Pritzker for his consideration on February 4, 2021. The governor had 60 calendar days to act – either veto the bill, issue an amendatory veto (which will kill the bill), sign it, or do nothing and it becomes law. With the Governor messaging that he would veto the bill, ITLA pushed to file a trailer bill SB 72.

The first filed amendment noted below, while it passed committee, saw significant pushback from hospitals (specifically “safety net hospitals”) and concerns raised by majority Democratic legislators in what was a 90-plus minute committee debate. So, ITLA went back to the drawing board, and crafted a new House Floor Amendment 2 to SB 72 that was debated and ultimately passed on March 18th by the House, on a partisan rollcall vote.  Key provision in Floor Amendment 2, among other changes:

  • It is de-coupled from the original prejudgment interest bill, the lame-duck HB 3360 ;
  • Lowers prejudgment interest from 9% to 6% (Amendment 1 to SB 72 was 7%), which now applies on all damages except punitive damages, attorneys’ fees, or statutory costs;
  • Interest begins to accrue from when the action is filed and cannot accrue for more than five (5) years;
  • Makes various changes related to the timing and acceptance or rejection of settlement offers, and the application of prejudgment interest in those instances;
  • Continues to exempt state and local governments, (which was added in Amendment 1); and
  • Applies to injuries or deaths that occurred before the effective date of the act, with interest accruing on the later of the date the action is filed or the effective date of the act (7/1/21 if signed), whichever is later.

As expected, Governor Pritzker vetoed the original bill, HB 3360 on March 25, 2021, the same day the Senate concurred in the House’s changes to SB 72, in a not so coincidental move. Despite some continued opposition from business interests, with the Hospital Association and a few other medical stakeholders neutral, we expect the compromise measure to be signed into law by the governor.






This website is general in nature, and is provided as a courtesy to you. Information is accurate to the best of Helmsman’s knowledge, but companies and individuals should not rely on it to prevent and mitigate all risks or as an explanation of coverage or benefits under an insurance policy. Consult your professional adviser regarding your particular facts and circumstance. By citing external authorities or linking to other websites, Helmsman is not endorsing them.

A delay in court – Prop 22 problems for gig workers

In the most expensive ballot initiative in the state’s history, California voters approved Proposition 22 last November, making it easier for employers to classify gig workers as independent contractors. However, Prop 22 advocates, who put forth more than $100 million in support of the measure, are cautious in their celebration.

As recently as February 10, 2021, the California Supreme Court declined to decide whether Prop 22 trumps pending litigation prior to the measure’s December 16, 2020, effective date. In addition, a pending constitutional challenge alleges the newly approved measure is invalid because it usurps the plenary power of the legislature and eliminates workers’ legally guaranteed rights. This challenge[i] by Prop 22 opponents is currently pending before a lower court in California and is expected to reach the state’s supreme court.

Biden administration scraps prior rules that favored workers’ independence

February report from Bloomberg Law signaled that the U.S. Department of Labor (DOL) is retreating from the Trump administration’s opinion that gig workers are exempt from wage protections because they’re independent contractors[ii]. The DOL’s Wage and Hour Administration recently scrapped a pair of interpretive letters from 2019, including one that platform-based companies such as Uber and Instacart could have used as a legal defense against claims that their drivers are employees subject to the Fair Labor Standards Act’s (FLSA’s) minimum wage and overtime provisions. 

With the Biden administration more closely scrutinizing whether these app-based businesses can continue to treat their workforce of service providers as independent contractors, employers should be prepared for additional screening measures when classifying workers as independent contractors during the current administration.

U.K.’s top court rules that Uber drivers are workers in a blow to gig economy

Uber’s arguments that its drivers are independent contractors and eligible for classification as such fell on deaf ears in a recent unanimous ruling by the U.K.’s Supreme Court[iii] — ending a legal battle that began in 2016 and has created an existential threat to Uber’s business model in the United Kingdom.

The firm contends that the U.K. Court’s ruling is limited to the drivers that were governed by the contract that existed in 2016. In the U.S., Uber plans to create and advocate for a hybrid model of classifying workers that enjoys the benefits of independence and simultaneously concedes certain worker benefits and protections. The jury is still out on whether and how the hybrid/third way might look and work for the gig economy.


Although Prop 22 was approved by California voters last November, there is no end in sight for the debate on classifying gig workers as independent contractors. Pending decisions in the lower courts, as well as the California and U.K. Supreme Courts, app-based businesses like Uber and Lyft do not have a clear path forward regarding workers’ rights and classifications.

The sheer magnitude and increasing influence wielded by this growing sector of the gig economy will likely lead to a hybrid classification scheme for gig workers that preserves some level of independence and includes certain benefits that are currently reserved for employees.








This website is general in nature, and is provided as a courtesy to you. Information is accurate to the best of Helmsman’s knowledge, but companies and individuals should not rely on it to prevent and mitigate all risks or as an explanation of coverage or benefits under an insurance policy. Consult your professional adviser regarding your particular facts and circumstance. By citing external authorities or linking to other websites, Helmsman is not endorsing them.

New York regulator leads the way on cyber-related risks

The New York Department of Financial Services (NY DFS), the state’s leading financial regulatory office, has created a Cyber Insurance Risk Framework for all property and casualty insurers authorized to operate in New York[i]. This call for stronger guidelines on cyber regulation is the result of multiple industry factors, including increased risk due to remote work during the COVID-19 era, the advent and growth of ransomware, and the recently revealed SolarWinds cyberattack.

This is the first such guidance offered to the industry by a U.S. regulator and reflects DFS Superintendent Linda Lacewell’s view that “cybersecurity is now critically important to almost every aspect of modern life – from consumer protection to national security” and that “cyber insurance plays a key role in managing and reducing cyber risk.“[ii]

This is not the DFS’s first foray into cyber regulation — in 2017, the department was also the first state insurance regulator to promote a cybersecurity regulation[iii] for financial services, designed to protect customer information held by insurers, banks, and other financial service providers. Continued into 2019, the DFS then created a separate Cybersecurity Division to lead the department’s regulatory efforts in this area.

Under the latest announcement, the DFS is focused on the growing market for cybersecurity insurance[iv], highlighting critical issues like data extortion and silent-cyber risks. As part of the recommended guidance, the office has compiled the collective insights into a comprehensive best practices plan, allowing insurers to manage their cyber insurance risk more effectively.

Cyber insurance best practices

While several of the best practices only impact insurers and will have little direct impact on insureds, others will clearly affect the interaction between insurers and their commercial customers:

Limit exposure to silent-cyber insurance risk

What does “silent-cyber” mean? Silent, or non affirmative, cyber insurance risk is the chance that an insurer might be required to cover loss from a cyber incident under an insurance policy that does not explicitly mention cyber. The DFS urges that all insurers assess their potential exposures, even those that do not explicitly offer cyber insurance, as this type of risk often impacts general liability and product liability, errors and omissions, and burglary and theft policies.

To mitigate against this risk, the DFS suggests making the cyber coverage explicitly clear in any policy that could be subject to a cyber claim. Insurers are also urged to buy reinsurance for this risk while they endeavor to identify and eliminate it, a process the DFS recognizes will take some time.

Evaluate systemic risk

It is important that insurers offering cyber insurance regularly evaluate systemic risk, including the risk posed by any critical third-party business vendors. This evaluation should include stress testing based on realistic, catastrophic cyber events (such as the 2017 NotPetya or the 2020 SolarWinds attacks) to ensure all opportunities for coverage have been explored.

Rigorously measure insured risk

Insurers that offer cyber insurance should have a data-driven, comprehensive plan for auditing cyber risk. This process includes gathering information on cybersecurity programs and researching topics like corporate governance and controls, vulnerability management, access controls, encryption, endpoint monitoring, boundary defenses, incident response planning, and third-party security policies. 

Educate insureds and insurance producers

The DFS urges insurers to offer comprehensive information about the value of cybersecurity measures and to incentivize the adoption of better cybersecurity plans by pricing policies based on the effectiveness of each insured’s cybersecurity program.  Insurers should also educate insurance producers about potential cyber exposures, the types and scope of cyber coverage offered, and monetary limits in cyber insurance policies.

Require notice to law enforcement

It is strongly recommended that cyber insurance policies include a requirement that victims notify law enforcement of a cyber event, a practice that some insurers currently follow and one that the department considers to be beneficial to the victim-insured and the public. 


As global threats continue to grow, the issue of cyber insurance will undoubtedly be an increasingly important one for U.S. regulators. With the release of the Cyber Insurance Risk Framework, the NY DFS has signaled its intention to lead the charge in fostering the growth of a robust cyber insurance market.

Not only must insurers take account of the framework’s requirements, including those related to ransomware payments, but commercial insureds and their risk managers and brokers should also review the framework as they assess their cyber insurance needs.

Exactly how this framework will impact the development of cyber insurance coverage and the market for this critical product remain to be seen, but the need to stay on top of this evolving matter is imperative for nearly all businesses.

[i] NYS DFS Insurance Circular Letter No. 2 (2021).


[iii] 23 NYCRR Part 500.

[iv] According to the National Association of Insurance Commissioners (NAIC), the U.S. cyber insurance market was $3.15 billion in 2019. It is estimated that by 2025, it will be more than $20 billion.



COVID-19 pandemic leads to a flurry of workers compensation presumption proposals

The coronavirus pandemic, the likes of which the United States had not seen for more than a century, prompted lawmakers in numerous states to enact broad protections for workers. As of September 30, 2020, a dozen states adopted regulations and issued executive orders that establish compensability presumptions for workers. An additional nine states enacted laws that create a presumption in favor of various categories of workers according to the National Council on Compensation Insurance1. The Insurance Information Institute estimates that COVID-19-related worker illnesses will add $81.5 billion to the workers compensation system2.


Our Public Affairs team lobbies for limitations


Our Public Affairs team engaged with policymakers dating back to March during the early days of the onslaught of workers compensation-related legislative proposals and executive actions. The team leveraged its memberships in various trade associations and chambers of commerce to lobby for reasonable and narrowly tailored compensability presumptions. Several key limitations sought by Public Affairs and allies include: (1) adoption or enactment of a disputable, rather than conclusive, presumption of compensability; (2) application of the law or order to a limited scope of workers; (3) limitation on the effectiveness of the laws and orders to a finite and reasonable timeframe; and (4) mandatory positive COVID-19 test result rather than mere exposure to the coronavirus. Most of the orders, rules proposed, and statutes enacted in the various states adhere to these tenets.


State spotlight – California


On March 6, 2020, California Governor Gavin Newsom was among the first chief executives to issue an executive order3  that created a rebuttable presumption of injury and compensability for employees who work outside the home and test positive for COVID-19. Newsom’s initial order was problematic to employers for several reasons. First, it shifted the burden from employees who were obligated to substantiate their claims that an injury occurred in the course and scope of employment to employers now tasked with overcoming a presumption that an injury occurred while on the job. Second, the order was remarkable for its scope, applying to a broad spectrum of employees who were not able to work from home, not just “essential workers,” such as those specifically identified in the Federal government’s list of “essential critical infrastructure workers”4  that Newsom referenced in his March 19 shelter-in-place order. Finally, the order provided employers only 30 days from the submission of a claim form to determine compensability. Governor Newsom issued the order while the legislature was temporarily adjourned, thus there were no committee hearings and limited opportunity to negotiate the language. The order applied to injuries sustained beginning March 19, 2020, and expired after 60 days — on July 6 — which set the stage for legislative action.


Legislators extend and expand California governor’s order


California lawmakers returned to Sacramento on July 27 after several members and staff tested positive for COVID-19 and safety-related precautions led to an unscheduled three-month recess. Limited access to members and staff in the capitol created unique and unprecedented challenges for lobbyists to engage and influence proposals. Senate Bill 1159 was one of several workers compensation legislative proposals that sought to expand benefits for employees who test positive for COVID-19 beyond Governor Newsom’s March 6 executive order5 . On August 1, nearly 100 organizations coauthored a letter opposing an earlier version of SB 1159 that would have extended a disputable presumption in favor of compensability until July 2024.


On September 17, 2020, Governor Newsom signed SB 1159, which codifies his earlier executive order and establishes a presumption of work causation for any positive COVID-19 test within 14 days of working for essential workers, including first responders, peace officers, and healthcare providers. A third section of SB 1159 extends the disputable presumption to all workers where an “outbreak” of four employees at work sites with fewer than 100 employees or 4 percent of employees at work sites with more than 100 workers test positive for COVID-19 within 14 days.  The latter two presumptions may be triggered during the period commencing July 6, 2020, and extends until January 1, 2023. 


New Jersey Governor Murphy approves WC presumption bill


On September 14, 2020, New Jersey Governor Phil Murphy signed Senate Bill (SB) 2380 into law. SB 2380 creates a rebuttable presumption of workers compensation coverage for COVID-19 cases contracted by “essential employees” during a public health emergency declared by an executive order of the governor. The law is effective immediately and retroactive to March 9, 2020. The law defines “essential employee” as “an employee in the public or private sector who during a state of emergency:”


  • is a public safety worker or first responder, including any fire, police, or other emergency responders;
  • is involved in providing medical and other healthcare services, emergency transportation, social services, and other care services, including services provided in healthcare facilities, residential facilities, or homes;
  • performs functions which involve physical proximity to members of the public and are essential to the public’s health, safety, and welfare, including transportation services, hotel and other residential services, financial services, and the production, preparation, storage, sale, and distribution of essential goods such as food, beverages, medicine, fuel, and supplies for conducting essential business and work at home; or
  • is any other employee deemed an essential employee by the public authority declaring the state of emergency.

What should employers and insurers expect in 2021?

 Unless and until the country controls the spread of COVID-19, legislators will continue expanding benefits for frontline workers who will face greater exposure to the coronavirus as cities and counties reopen. More states, especially ones saddled with budget deficits from economic downturns, will push to ensure workers compensation responds for employees exposed to the coronavirus. Future challenges will include retroactivity of the presumption, scope of workers eligible for expanded benefits, and the duration of compensability presumptions enacted.


1 State activity: COVID-19 WC Compensability presumptions

2 COVID-19 and Workers Compensation: Modeling Potential Impacts

3 Executive order N-62-20

4  Advisory memorandum on identification of essential critical infrastructure workers during COVID-19 response

5 Executive order N-33-20

This website is general in nature, and is provided as a courtesy to you. Information is accurate to the best of Helmsman’s knowledge, but companies and individuals should not rely on it to prevent and mitigate all risks or as an explanation of coverage or benefits under an insurance policy. Consult your professional adviser regarding your particular facts and circumstance. By citing external authorities or linking to other websites, Helmsman is not endorsing them.

The impact of COVID-19 and federal relief on future budgets

The COVID-19 pandemic and resulting economic downturn created the perfect storm for state and local budgets in the United States. The full extent of the fiscal problem is unknown and greatly dependent on the course of the virus.

States were generally on course for FY20 beginning July 1, 2019, through June 30, 2020, when the pandemic hit in March. State stay-at-home mandates, imposed to slow the spread of the pandemic, negatively impacted consumer spending, which significantly reduced sales and excise tax revenues. Unemployment skyrocketed, resulting in decreased state income and payroll taxes. The April 15 tax filing deadline was extended to August 15, adding further uncertainty regarding revenue.

The uncertainty and reduction in revenue came at a time when emergency response by government to COVID-19 increased state operating costs dramatically. Cities and towns were also negatively impacted with reductions in every revenue source, including property and sales tax and permit and utility fees.

Although revenue forecasts have been challenging because of the uncertainty associated with the virus, most states are anticipating budget shortfalls through FY21 or longer. Unlike the federal government, states generally cannot borrow funds because there are statutory or constitutional requirements to enact balanced budgets.

The federal government has taken several steps to address COVID-19. Starting in March, the federal government enacted several appropriation bills to address the pandemic.

The question is: will Congress pass additional legislation to address the pandemic? Congress went back in session on November 9 but agreement on Phase IV COVID-19 funding is still uncertain. Speaker of the House Nancy Pelosi and Treasury Secretary Steven Mnuchin attempted to negotiate a new COVID-19 relief bill. The Speaker proposed a $2.2 trillion measure while the White House, through Mnuchin, was willing to agree to $1.8 trillion. Before the election, President Trump said we will have a tremendous stimulus package immediately after the election, but the was seemingly based on the condition of him winning re-election. Senate Majority Leader Mitch McConnell has indicated that he will not take up an expensive spending bill. Instead, McConnell plans on moving forward with a narrow $500 billion measure.

The major sticking points are the amount of the appropriation and the level of unemployment benefits and whether the bill contains state and local aid and liability protections for business. Republican and Democratic lawmakers that are in tight election races are pushing for a deal before the election. Although there has been some progress, it is uncertain whether lawmakers will reach an agreement before the election.

Even if there is significant federal funding to state and local governments, many believe that there will still be a need for independent solutions to address budget shortfalls at the state and local level. The impact on individual states will depend on the impact of COVID-19, the amount in any state rainy day fund and how well the state pension system is funded. To impact budget deficits immediately, states will use rainy day funds, reduce services or workforce levels, raise current taxes or fees, offer early retirement programs, defer costs, or look for new tax revenue.

The states may also pursue structural changes to reduce costs. They can look to maximize COVID-19 federal funds, consolidate government or services, reorganize, and reduce unnecessary activities. State government can also use tools and technologies to create efficiencies. States will likely use some combination of budget cuts, raising existing tax rates, and introducing new tax revenue sources to close budget gaps.

Ultimately the course of action any state pursues will be driven by how long the pandemic lasts and how severe any resurgence might be, and how the overall economy responds and how quickly it recovers, factors which are exceedingly difficult if not impossible to predict.

This website is general in nature, and is provided as a courtesy to you. Information is accurate to the best of Helmsman’s knowledge, but companies and individuals should not rely on it to prevent and mitigate all risks or as an explanation of coverage or benefits under an insurance policy. Consult your professional adviser regarding your particular facts and circumstance. By citing external authorities or linking to other websites, Helmsman is not endorsing them.

COVID-19 pandemic prompts numerous policyholder accommodations

Insurers recognize favorable trends and announce refunds and credits for policyholders

The unprecedented financial disruption caused by the COVID-19 pandemic has prompted insurance regulators and insurers to implement an array of accommodations for adversely impacted policyholders.

Some accommodations were first announced voluntarily by insurers, such as premium refunds for private passenger auto insurance (to reflect reduced miles driven during mandated stay-at-home orders), while subsequent measures were urged, or mandated, by gubernatorial executive orders and/or state insurance department directives and bulletins.

Regulators expand on refunds with requests for cancellation forbearance and free coverage

Because the impact of the pandemic has been uneven across the country, the need for accommodations, and the relief offered or mandated, has varied by state, but the most common measures have been:

  • Moratoriums on policy cancellations or nonrenewals for nonpayment of premiums and extended premium payback periods, in some cases as long as 12 months
  • Relaxing due dates for premium payments
  • Waiving late fees and penalties and mandating premium payment plans, which will avoid a lapse in coverage
  • Expanding auto coverage to allow personal vehicles to be covered when delivering food, medicine, or other essential services

Additionally, many insurance departments have urged insurers to make any and all “reasonable accommodations” for adversely impacted individuals and businesses.

Recent directives from regulators expand to include businesses

While most of the above accommodations could apply to personal or commercial insureds, some relief has been targeted to the unique needs of business insurance.  Examples include:

  • Requiring insurers to post on their websites, or to otherwise inform their commercial policyholders, of their willingness to work on a case-by-case basis to evaluate changes in risk and to provide appropriate accommodations
  • Offering flexible billing and premium payment options
  • Issuing business owner policy premium refunds or alternatively directing that when policies are audited, a credit be given if there has been a reduction in sales or payroll
  • Performing midterm policy audits and providing flexibility regarding completion of audits
  • Expanding coverage for vehicles that are currently being used for business purposes which were not being used for business purposes prior to COVID-19
  • Reducing coverage for vehicles that were previously being used for business purposes, but are not currently being used for business purposes on account of COVID-19
  • Adjusting exposures for general liability to account for factors such as reduced payroll, sales, or receipts
  • Adjusting exposures for workers compensation to account for factors such as reduced payroll
  • Automatically suspending cancellations based on nonpayment of premium for commercial lines

Many individuals and businesses have sought and received the type of accommodations outlined above since the start of the COVID-19 pandemic, and insurance departments continue to monitor the market closely to determine whether extensions or added measures are needed.

Individuals or businesses in need of first-time or additional relief should consult the website of their respective state insurance department to understand what accommodations are available. Businesses can also contact their third-party administrator (TPA), risk-management consultant, agent-broker, or their insurer directly to explore options for appropriate accommodations.

This website is general in nature, and is provided as a courtesy to you. Information is accurate to the best of Helmsman’s knowledge, but companies and individuals should not rely on it to prevent and mitigate all risks or as an explanation of coverage or benefits under an insurance policy. Consult your professional adviser regarding your particular facts and circumstance. By citing external authorities or linking to other websites, Helmsman is not endorsing them.

Workers compensation presumption legislation

Workers compensation presumption bills are not new. Over the years, states have passed legislation that extended workers compensation coverage to firefighters who developed certain cancers (lung) and fire and police personnel who suffer heart attacks. In response to the pandemic, several states have passed legislation or used executive authority to extend workers compensation coverage to include COVID-19 as a work-related illness. The scope and application of the legislation or executive orders are dependent on the language contained in the bills in the following areas.

Scope of employees covered – Some legislation or executive orders limit the scope of employees entitled to the COVID-19 presumption to healthcare workers and first responders, while others have broad application and include all “essential workers,” like grocery store employees, corrections officers, and postal service workers.

How the presumption works – A presumption can be conclusive or rebuttable, which would still allow an employer to challenge whether the COVID-19 infection was work-related.

What triggers coverage – Narrow proposals require that an employee have a positive test or a medical diagnosis of COVID-19, whereas broader legislation provides workers compensation coverage for employees that were only exposed to coronavirus.

Timeline for presumption – Most bills limit the application of the presumption to the timeline of a gubernatorial emergency order for COVID-19; however, a broad presumption could permanently change the state workers compensation law.

This website is general in nature, and is provided as a courtesy to you. Information is accurate to the best of Helmsman’s knowledge, but companies and individuals should not rely on it to prevent and mitigate all risks or as an explanation of coverage or benefits under an insurance policy. Consult your professional adviser regarding your particular facts and circumstance. By citing external authorities or linking to other websites, Helmsman is not endorsing them.

Telemedicine goes mainstream

Now more mainstream due to coronavirus pandemic

The coronavirus pandemic has ushered in a new era and level of acceptance for telemedicine and telehealth.1 The medical community, spurred by necessity and consumer demand, is increasingly embracing the inherent efficiencies and public health safety precautions that are available to practitioners and consumers of remote medicine. All 50 states have issued bulletins, executive orders, and notices urging and, in some cases, requiring insurers to accept and broaden access to telehealth programs and plans to cover the costs. Numerous states’ directives require pay parity, a longstanding deterrent, for reimbursements of healthcare services rendered via telemedicine at the same rate as in-person services.2 Regulators have also expanded telemedicine to include a much broader range of technologies for the delivery of services, including by phone, audio/video, secure text messages, email, or a direct patient portal.3

State legislatures pave the way during and likely after pandemic

Since the onset of the COVID-19 pandemic, many states expanded coverage and availability of telehealth services to limit spread of the disease and expand access to healthcare. In March 2020, Medicare began allowing all enrollees to use telemedicine, an option previously available only to those in remote areas or for short, specific visits. Additionally, physicians were granted reciprocity to provide telemedicine services to Medicare patients across state lines. Some states, including Missouri and Pennsylvania, also allowed physicians licensed outside the state to provide telemedicine care more easily. Idaho, Colorado, and others allowed providers to use non-HIPAA-compliant technologies in certain circumstances. Many states required insurers (VT, IA, AZ) to reimburse telehealth services at the same rate as in-person services (i.e., payment parity). Several states have also limited or reduced to zero the amount state-regulated insurers may charge in consumer cost sharing for telehealth services during the pandemic. Healthcare systems also worked to enhance access to telemedicine services by increasing physician availability and waiving copays for the duration of the pandemic.4

Necessity, in this case pandemic, is the mother of invention and progress

Since COVID-19 became a national health emergency, the landscape for telehealth has shifted dramatically and will likely continue to shift as healthcare needs increase over time. Telehealth proponents have advocated many years for the kind of approach being taken to virtual care observed currently. Relaxing originating site requirements so that patients may be treated where they are located, increasing the services covered under government programs, requiring payment parity, expanding the acceptable modalities to include the technology most convenient for care, and foregoing the in-office visit requirement for the prescribing of controlled substances are all advances telehealth advocates have been championing for decades.5

1 Telemedicine and telehealth are often used interchangeably. Telemedicine refers strictly to remote clinical services performed by licensed providers. Telehealth encompasses a broader set of activities, including educational webinars, licensing or credentialing services, or patient care meetings.

2 Telehealth, 2020.

3 “COVID-19 Insurance: US Insurance Regulators Require Increased Access to Telemedicine,” Clyde & Co., May 20, 2020

4 Telehealth, 2020.

5 Kyle Y. Faget, Telehealth in the Wake of COVID-19, 22 No.3 Journal of Health Care Compliance, P.5

This website is general in nature, and is provided as a courtesy to you. Information is accurate to the best of Helmsman’s knowledge, but companies and individuals should not rely on it to prevent and mitigate all risks or as an explanation of coverage or benefits under an insurance policy. Consult your professional adviser regarding your particular facts and circumstance. By citing external authorities or linking to other websites, Helmsman is not endorsing them.

California’s worker classification – truckers and gig economy mount challenges

As previously reported in the second quarterly edition of this publication, the California legislature recently codified the California Supreme Court decision in Dynamex to establish a three-prong “ABC test” for determining whether a worker is an employee or independent contractor.  Employers must establish each of the following prior to classifying workers as independent contractors:

  1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

  2. The worker performs work that is outside the usual course of the hiring entity’s business; and

  3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

The decision and subsequent legislation were intended to target the gig economy, but its scope has broad implications for a vast array of employers in wide-ranging industries and sectors of the economy.  Some industries were crafty and able to lobby the author to include entity-level exemptions for certain professions, including physicians, accountants, and cosmetologists, but the exceptions are few vis-à-vis the broad swath of industries and professions covered by the new law.  (For more information regarding the law’s entity-level exceptions see the Cal Chamber’s Roadmap to AB 5.)


Outcries from the business community have been deafening and challenges to AB 5 have only begun.  Uber, Lyft, DoorDash, Postmates, and Instacart have committed $110 million to sponsor a ballot measure in 2020 that would create an entity-level exemption for the gig economy including transportation network companies and food delivery services.  On November 12, 2019, the California Truckers’ Association filed a lawsuit in federal court and alleged that the new law will prohibit truckers from working as independent drivers and profiting from their own vehicles while setting their own schedules (Source – Sacramento Bee, November 12, 2019).  On December 30, 2019, Uber and Postmates filed a federal action against the State of California, and alleged that AB 5 violates due process and equal protection rights guaranteed by the Constitution  (Source – Wall Street Journal, December 30, 2019).


Recognizing the unrest and uncertainties created by the new law, the California Labor and Workforce Development Agency recently created an employment status portal designed to help employers determine whether workers are employees or independent contractors.  The site includes information to assist employers regarding the ABC test codified in AB 5, the employment status of workers, and various employer legal requirements including workers compensation obligations and wage and hours laws. 


The dust is anything but settled on AB 5’s impacts and effects on employers and workers.  While the fate of the new law plays out in state and federal courts, employers are faced with the immediate task of properly classifying workers in compliance with applicable laws and regulations.  Assemblywoman Lorena Gonzales, the author of AB 5, has urged city attorneys in the state to seek court orders beginning on January 1 that require employers to comply with the new law.  Gonzales is also sending a signal that further attempts to weaken and carve out exceptions to AB 5 in 2020 will meet formidable opposition.  Moreover, the new law codifies and expands the California Supreme Court decision in Dynamex which suggests the prospects for judicial relief are dismal.


California, often a pioneer for legislation that eventually spreads across the country, set the tone for other states to follow its lead in 2020 and beyond.  New York and New Jersey are expected to take similar steps toward classifying more workers as employees rather than independent contractors in each state’s respective 2020 legislative sessions.

This website is general in nature, and is provided as a courtesy to you. Information is accurate to the best of Helmsman’s knowledge, but companies and individuals should not rely on it to prevent and mitigate all risks or as an explanation of coverage or benefits under an insurance policy. Consult your professional adviser regarding your particular facts and circumstance. By citing external authorities or linking to other websites, Helmsman is not endorsing them.

In absence of federal action, states likely to expand paid family and medical leave in 2020

Late last year the Business Roundtable and the Human Resources Policy Association, along with other business advocacy groups representing large employers, sent letters to President Trump and Congress urging adoption of a national paid leave program.  Both groups noted that while most large employers provide generous paid leave, there is a need for “economy-wide action” on this issue.

A growing number of large employers is increasingly supportive of federal action on the issue of paid family and medical leave for several reasons, including the belief that paid leave helps attract and retain talent in a tight labor market and recognition that the U.S. is an outlier among industrialized countries in not having uniform paid leave, a benefit more employees need and expect as work and family life dynamics continue to change.

Perhaps the main reason that employers – especially those operating nationally or in multiple states – are increasingly receptive to a federal paid leave program is the increasing cost and complexity of having to comply with a patchwork of conflicting mandatory state (and in some cases municipal) paid sick leave and/or paid family and medical leave programs.

Operating in all 50 states and 30 countries, Liberty has long offered generous paid leave benefits and prefers a uniform plan for all employees regardless of which state they reside or work in.  That goal is increasingly difficult to attain as we are forced to comply with an ever-increasing number of differing state paid family and medical leave programs.

Congress has entertained numerous proposals since 1993 to expand FMLA to provide paid leave, but until recently there was no significant action other than enactment in December 2017 of the Strong Families Act, which included tax incentives to private-sector employers to offer paid family and medical leave to their employees voluntarily.

More recently, a paid leave compromise was enacted as part of the Defense Authorization Act for fiscal year 2020.  That compromise will provide 12 weeks of paid parental leave to approximately 2.1 million federal and Congressional employees to care for a newly born or adopted child.  Benefits begin in October 2020.

The chance of additional federal action should not be overstated, however.  According to Chris Russell of the Liberty Mutual Government Affairs team, “Notwithstanding recent Congressional action on paid parental leave for federal employees, and the apparent appetite of the House to consider further action, there is little likelihood the Senate will expand paid family leave.”

Additionally, the Workforce Protections Subcommittee of the House Education and Labor Committee has also taken up the issue, although the focus of its initial hearing was on expansion of the unpaid FMLA program.

Among the proposals currently under consideration by Congress, which may be considered by the full House, are the following:


  • New York Senator Kirsten Gillibrand has sponsored The Family Act to create a national social insurance program funded by a payroll tax which would provide cash benefits to eligible employees who are engaged in certain caregiving activities. This proposal seeks to make it feasible for those workers to take unpaid leave under the federal FMLA or unpaid leave voluntarily provided by employers.  The Gillibrand proposal would offer new parents up to 12 weeks off at two-thirds of their monthly wages, financed by a 0.2 percent payroll tax paid by both employees and employers.
  • A proposal by Senator Rubio of Florida to reform Social Security to allow workers to take up to three months of Social Security benefits in the form of “Earned Parental Leave” benefits after the arrival of a new child, in exchange for delaying retirement benefits
  • A bipartisan bill sponsored by Senator Cassidy of Louisiana and Senator Sinema of Arizona to reform the Child Tax Credit to offer parents a benefit upon the arrival of a new child in exchange for reduced future tax credits
  • A proposal by Senator Mike Lee of Utah to reform the Fair Labor Standards Act to give private-sector employees an option to accrue paid time off rather than time and a half for overtime hours worked
  • The Freedom for Families Act sponsored by Representative Andy Biggs of Arizona to reform Health Savings Accounts (HSAs) to allow employees to use these savings vehicles to pay for family and medical leave



Although Congress continues to consider various PFML proposals, significant federal action is not considered likely in the short term.

Even if Congress were to mandate paid leave for private-sector employees, an ERISA-like pre-emption is also unlikely given that pre-emptions are not common in the employment law arena.

As a result, numerous states, will continue to explore and debate mandatory paid leave proposals in 2020.  Among the states likely to give serious consideration to these proposals this year are Colorado, Vermont, New Hampshire, Wisconsin, Virginia, Minnesota, Maine, and New Mexico.

Large multijurisdictional employers must stay on top of these developments and through national and state business groups should advocate for ameliorating provisions like an exemption from state paid leave mandates for companies that already provide equivalent or comparable benefits; state exemption provisions which would block municipalities from enacting their own plans which conflict with state-mandated plans; and uniform definitions, standards, and rules consistent with the federal FMLA.

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