Saturday, June 13, 2020

Pandemic Heroes Compensation Act of 2020: My Preliminary Observations on the Proposed Bill

While I suspect that workers’ compensation claims, even without the aid of workers’ compensation causation presumptions, may fare better than some actuaries suspected (preliminary scuttlebutt of about a 40% success rate is higher than I expected), there is no reasonable doubt that large numbers of workers will ultimately go uncovered under workers’ compensation. As I have argued throughout my postings on this blog, workers’ compensation exclusions and denials will pose many challenging legal questions. In the meantime, however, many disabled workers will simply find themselves uncompensated (some may receive assistance under the Federal Pandemic Unemployment Compensation Program; eligibility is tricky, however, because under state unemployment compensation law an individual must generally be available for work—and not disabled—in order to qualify, a topic beyond the scope of this post and perhaps of this blog).

In short, there are gaps and fissures appearing under state workers’ compensation and tort laws—and gaps even under the state-federal compensation models applicable to disabilities (Social Security Disability, for example, does not cover compensation for partial or temporary disability). In apparent response to such gaps, Carolyn B. Maloney, the Chairwoman of the Committee on Oversight and Reform, held “a remote hearing to examine the health and economic burdens shouldered by essential workers and their loved ones during the coronavirus pandemic . . . H.R. 6909, the Pandemic Heroes Compensation Act of 2020, was introduced by Chairwoman Maloney to create a compensation fund modeled after the September 11th Victim Compensation Fund (VCF).” The bill was introduced on May 15, 2020. I provide here a brief summary and my initial impressions of the bill.


Claim Amount:

  • Noneconomic losses shall not exceed such limit as the Special Master (see below) may impose.
  • Claims are reduced “by the amount of the collateral source compensation the claimant has received or is entitled to receive as a result of the claimant suffering from COVID–19.”
  • No punitive damages



Special Master with regulatory powers



  • Claimant designated an essential worker during the eligibility period or was a family member of such an essential worker who resided with the essential worker during the eligibility period
  • Expressed symptoms consistent with COVID–19, including those with laboratory confirmations, diagnosis by a healthcare provider, or for whom there is or was an absence of an alternate diagnosis that explains claimant’s or decedent’s symptoms
  • Suffered economic loss
  • One claim per worker filed either by worker or on behalf of a worker who is deceased


Essential Worker:

Any individual, employee, or contractor working for a person, business, nonprofit entity, or Federal, State, Tribal, territorial or local government that is determined, during the response to the COVID–19 pandemic, to be essential, based on State, local, Tribal, or territorial orders or declarations (or equivalent), or Federal guidance published by the Cyber & Infrastructure Security Agency (CISA), and who performed work outside their place of residence.



Both “such amounts as may be contributed by individuals, business concerns, or other entities to carry out this Act, under such terms and conditions as the Attorney General may impose” and “[t]here is established in the Treasury of the United States a fund to be known as the “COVID–19 Compensation Fund” (contributed amounts must be used prior to appropriated amounts).


Attorney Fees:

The Special Master shall have the sole discretion to determine reasonable compensation for services rendered for attorney fees for services rendered, if any.


Right of Subrogation:

U.S. has right of subrogation with respect to any claim paid by the U.S.



“There is authorized to be appropriated for purposes of carrying out this Act such sums as may be necessary for fiscal year 2020 and each fiscal year thereafter through fiscal year 2026, to remain available until expended.”


Ultimately, it is hard to assess the bill because the appropriation levels and caps on compensatory damages are not known. With respect to compensatory damages, many will recall the tremendous level of discretion afforded to the Special Master under the Victim’s Compensation Fund. It is difficult to assess how this will carry over to a much larger potential class of claimants. It may be workable to the extent that COVID-19 victims seek disability benefits for “closed window” durations. The difficulty is that we do not know if COVID-19 impacts will be temporary. With respect to appropriations, the ongoing funding battles over the 9-11 Fund are well known, and Jon Stewart is unlikely to live forever.  I think there are also deep questions about the relationship between one-time disaster czars and the rule of law.

The eligible class is expanded beyond first responders, but there will continue to be debate over who qualifies as an essential worker. The bill would effectively punt that question to the states, which will now have an incentive to classify workers as “essential,” or to avoid doing so, based (one presumes) on the political winds in a given state—an outcome I do not prefer. My final preliminary observation is that the eligibility of “any individual, employee, or contractor . . .” would seem to extend eligible claimants well into the Gig economy. The truth of it is--we have to start somewhere. As some of us have been yelling for a long time (and others are just beginning to understand), there is no additional risk that workers can bear. Ignore it at your peril.

Michael C. Duff

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