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Are Death Benefits Owed When an Employee Dies after Contracting the Coronavirus?

Life Insurance PolicyThe Context

There have been over 40,000 confirmed COVID-19 cases in Michigan. This figure includes over 4,000 deaths.  We are currently averaging about 1,000 new cases and 100 new deaths per day. Fortunately, the curve is flattening and some areas of the state have seen decreases.

Governor Whitmer signed three new Executive Orders on April 30, 2020.  (EO-2020-66, EO-2020-67, and EO-2020-68). The Executive Orders terminated the existing State of Emergency and Disaster declarations issued under the Emergency Management Act and declared a new State of Emergency under the Emergency Powers of the Governor Act of 1945 and a new State of Emergency and State of Disaster under the Emergency Management Act of 1976. The new State of Emergency and State of Disaster will remain in effect through May 28, 2020, but could be extended. Governor Whitmer also issued another Executive Order extending the restrictions on bars, restaurants, casinos, theatres, gyms, and nail and hair salons through May 28, 2020.  (EO-2020-69). This extension did not relax the prior restrictions on non-essential businesses imposed by the “Stay Home, Stay Safe” Executive Order. The most recent iteration of the "Stay Home, Stay Safe" Executive Order extends through May 28, 2020 with exceptions allowing construction, real estate, and work that is "traditionally and primarily performed outdoors" to resume (effective May 7, 2020) and manufacturing to resume with stringent safety measures in place (effective May 11, 2020). (See EO-2020-77). These declarations appear to be working and the “curve” has leveled off for the time being.

Employers and carriers continue to face potential exposure for disability and death claims related to COVID-19. We anticipate that many of these claims will involve “first response employee(s).” As discussed in our earlier April 2, 2020 Legal Update, the Director of the Michigan Department of Labor and Economic Opportunity promulgated a series of Emergency Rules that establish a rebuttable presumption of personal injury for first response employees diagnosed with COVID-19 by a physician or positive test. However, we anticipate you will also see claims made by essential employees and those employees working in environments where they are at increased risk of contracting COVID-19.

In many instances, the exposure for a disability claim resulting from COVID-19 will be minimal (most people recover within a month and are able to return to work without issue). However, in Michigan, approximately 9% of people with a confirmed diagnosis do not survive. Claims for death benefits will likely present greater exposure than simple disability claims. Therefore, the unique issues related to the compensability of death benefit claims allegedly resulting from COVID-19 merit discussion.

The Law

Contracting COVID-19 generally does not result in immediate death. An employee who contracts COVID-19 will typically have a period of disability prior to succumbing to the virus. This period of disability prior to death impacts, (1) the criteria to be used when determining whether the employee’s death is compensable, and (2) the amount of benefits a dependent is entitled to receive.

When an employee dies immediately following a work-related injury the criteria under MCL 418.301 and MCL 418.321 govern compensability. Pursuant to Section 301, the death will be compensable if the employment caused, contributed to, or hastened the employee’s death. However, when the death is preceded by a period of disability, MCL 418.375 may become relevant. See Noble v. Ford Motor Co, 152 Mich. App. 622 (1986).

Section 375 provides that when an employee ultimately dies after a period of disability, death benefits are paid in lieu of any further disability indemnity payments. Under Section 375(2) there is an increased burden of proof. Death benefits are only owed if the work-related injury was the “proximate cause” of the death.

Initially, the courts interpreted “proximate cause” to mean a substantial factor in causing the employee’s death. See Hagerman v. Gencorp Automotive, 457 Mich. 720 (1998). However, the Michigan Supreme Court overruled Hagerman in Paige v. City of Sterling Heights, 476 Mich. 495 (2006). In Paige, the court held the term “proximate cause” means the “sole proximate cause” or “the one most immediate, efficient, and direct cause of the injury or damage.” The decision was based on the Michigan Supreme Court’s earlier interpretation of the phrase “proximate cause.” See Robinson v. Detroit, 462 Mich. 439 (2000). Interestingly, Robinson did not even involve a workers’ compensation injury.

Neither the Act nor the courts have provided any clear guidance on what amount of time must pass between the personal injury and death to trigger the heightened standard under Section 375. Although the required time period remains unclear, there are a handful of cases that offer some direction.

In Barnes v. Campbell, Wyant & Cannon, 188 Mich. App. 46 (1991), the court applied Section 375 because the employee was already receiving disability benefits at the time he died. The court specifically distinguished the facts in Barnes from Leaveck v. General Motors Corp., 147 Mich. App. 781 (1985) and Kostomo v. Marquette Iron Mining Co., 405 Mich. 105 (1979). The court noted that, in Leaveck and Kostomo, there was no period of disability preceding the death—thus, the burden of proof set forth in Section 301 was applicable. In Leaveck, the employee died two days after his last day of work. In Kostomo, the employee started experiencing chest pain and other physical symptoms throughout his shift on May 20, 1968. The pain became too much, and he was driven from work directly to the hospital. He died twelve days later of a heart attack.

The Appellate Commission also touched on this issue in McCollum v. Textron Inc., 2008 ACO #105. The Appellate Commission stated there must be "some" passage of time between the injury and death but the issue of just how much was not addressed. The Appellate Commission noted the language in Section 375 mentions a period of time in which the employee “would receive weekly payments” for disability. The McCollum court concluded the relaxed burden of proof set forth in Section 301 applied because all of the events occurred in one day (it was just a matter of hours between the work event and when the employee passed away).

The cases support application of Section 301 when an employee leaves work and heads directly to the hospital and dies that day from COVID-19. In the alternative, if an employee goes off work due to disabling COVID-19 and is receiving workers’ compensation benefits before ultimately succumbing to the virus, the heightened burden of proof set forth in Section 375 will likely apply. We anticipate that a number of cases will be less clear cut and involve instances where the employee dies within a few days of going off work and before benefits are paid. Whether to apply Section 301 versus Section 375 will be fact-dependent and will need to be analyzed on a case by case basis.

In cases involving “first response employees,” there is also some question as to whether the Emergency Rule’s rebuttable presumption extends to the death and creates a presumption that it too was “work-related.” The language in the Emergency Rule clearly establishes a “first response employee” is entitled to a rebuttable presumption that he or she suffered a work-related personal injury if diagnosed with COVID-19. However, under both Sections 301 and 375, additional proofs beyond those needed to establish a work-related personal injury are required to establish entitlement to death benefits. The language of the Emergency Rule is clear on its face and does not include language altering the need for these additional proofs. Applying the Emergency Rule, a dependent of a deceased “first response employee” diagnosed with COVID-19 will not need to prove the COVID-19 was work-related (unless the employer can somehow rebut the presumption in the manner prescribed in the Emergency Rule). However, he or she will still need to prove COVID-19 caused, contributed to, or hastened an immediate death or, in cases where the death follows a period of disability, that COVID-19 was the “sole proximate cause” or “the one most immediate, efficient, and direct cause” of death pursuant to Section 375.

If the decedent’s dependent carries the burden of proof, the dependent will be entitled to death benefits. Under Section 375(2), the employer will receive credit for benefits paid during the period of disability preceding the death toward the 500-week limit. For instance, assume an employee developed work-related COVID-19 and went off work on April 1, 2020, but did not succumb to the disease until April 22, 2020, and received 3 weeks of disability benefits during that period. Assuming the heightened burden of proof in Section 375 applies (due to the fact that the death followed a period of disability), if his or her dependent proves COVID-19 was the “sole proximate cause” or “the one most immediate, efficient, and direct cause” of death, he or she will be entitled to 496 weeks of benefits after taking into account the credit for the disability benefits paid.

It is worth noting that a dependent of the deceased employee has two years from the date of death to bring a claim under MCL 418.381(1). The ability of the dependent to bring a claim is not limited by the employee’s failure to bring a claim during his or her lifetime. For instance, assume an employee contracts COVID-19, is off work for a number of weeks, recovers and returns to work without filing a claim, and subsequently dies a few months later from complications arising from the virus. The employee’s dependents may pursue a claim for death benefits within the statutory two year claim period despite the fact the employee never made a claim for disability benefits during his or her lifetime.

Additionally, dependents of the deceased employee have a direct separate claim and are not barred by res judicata. This is because the dependent is not a party in interest to a proceeding by the employee during his or her lifetime. Therefore, the dependents’ claim for death benefits is a new cause of action arising from the death and is not affected by adjudications related to disability during the employee’s lifetime. See Wolanin v. Chrysler Corp., 304 Mich. 164 (1943).

Example

Individuals with certain comorbidities are more likely to succumb to COVID-19. These co-morbid factors might include things like advanced age, obesity, diabetes, heart disease, hypertension, and immune conditions.

If the heightened burden of proof under Section 375 does not apply, benefits will be owed to a dependent if the work-related COVID-19 caused, contributed to, or hastened the employee’s death. If the heightened burden of proof set forth in Section 375 applies, pursuant to Paige, a dependent may prevail on a claim for death benefits only if able to prove that the work-related COVID-19 was the “sole proximate cause” or “the one most immediate, efficient, and direct cause” of death.

​​​​​For example, assume that a nurse working in a nursing home suffers from a pre-existing kidney condition that has required medication and treatment throughout her life. While at work she develops difficulty breathing. She leaves work and drives directly to the hospital where she is admitted, and passes away the next morning from respiratory failure. A postmortem test confirms she was positive for COVID-19. Under these circumstances the heightened standard under Section 375 will not apply and death benefits will be owed to her dependent if the dependent can show COVID-19 caused, contributed to, or hastened her death pursuant to Section 301.

In the alternative, let’s assume that same nurse working in a nursing home is diagnosed, vis-a-vis a test, with COVID-19 and goes off work. She is entitled to a rebuttable presumption of “personal injury” pursuant to the March 30, 2020 Emergency Rule and will receive benefits for her period of disability (unless the employer can rebut the presumption in the manner prescribed in the Emergency Rule). A week after testing positive for COVID-19, she develops breathing difficulties and is placed on a ventilator for three weeks. While on the ventilator her kidneys fail, and she then dies one month after her positive test result. The death certificate lists COVID-19 and kidney failure as the causes of death. Let’s assume the nurse’s dependent daughter files a claim for death benefits. The daughter will prevail if she can prove COVID-19 was the “sole proximate cause” or “the one most immediate, efficient, and direct cause” of death pursuant to Section 375.

Now let’s assume that the kidney failure was the sole proximate cause of death. Does the dependent’s claim for benefits fail? Not necessarily. The rebuttable presumption of “personal injury” only applies to the COVID-19.  No similar presumption applies to the kidney condition. The daughter will first need to prove the kidney failure was a personal injury arising out of and in the course of the decedent’s employment. In order to establish kidney failure as a personal injury, she will need to prove the COVID-19 caused, contributed to, or aggravated the pre-existing kidney condition in a manner so as to create a pathology that is medically distinguishable. If the daughter can establish the kidney condition was a personal injury under the Act (by showing the presumed work-related COVID-19 caused the medically distinguishable kidney failure), then she will prevail assuming she meets the heightened standard under Section 375 (that the kidney failure was the “sole proximate cause” or “the one most immediate, efficient, and direct cause” of death). The same would be true if the nurse recovered from her initial illness but died a year later from kidney disease.

The Legal Framework for Making Compensability Determinations

In the coming months, we anticipate you will be faced with the issue of determining whether death benefits are owed when an employee passes away from COVID-19 or sequela. The deaths will likely occur under different circumstances and to individuals with varying pre-existing co-morbid factors. When considering whether a COVID-19 related death is compensable one must consider:

  • How much time separates the personal injury and death?
  • Were disability benefits paid prior to the death?
  • What are the pre-existing co-morbid factors?
  • Was COVID-19 (or a different work-related personal injury) the one most immediate, efficient, and direct cause of death?
  • Was there an intervening cause of death?

The intersection of the rebuttable presumption created by the Emergency Rule and the existing statutory provisions make this a very complex area of law. If such issues arise and you have questions or would like to discuss a specific claim, please contact a member of the Foster Swift workers’ compensation practice group.  We are here to help:

Alicia Birach...248.785.4172...abirach@fosterswift.com
Mike Cassar...517.371.8110...mcassar@fosterswift.com
Brian Goodenough (Practice Group Leader)...517.371.8147...bgoodenough@fosterswift.com
Tyler Olney...248.538.6352...tolney@fosterswift.com
Mike Sanders...517.371.8210...msanders@fosterswift.com

While the information in this article is accurate at time of publication, the laws and regulations surrounding COVID-19 are constantly evolving. Please consult your attorney or advisor to make sure you have the most up to date information before taking action.

Categories: COVID-19 and Workers' Compensation, Employee Benefits, Workers' Compensation

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Alicia Birach is a member of the Employer Services Practice Group and works out of the firm's Southfield office. She has extensive experience representing insurance carriers, third party administrators and employers against workers' compensation claims. Additionally, she is experienced in counseling employers on labor and employment issues.

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