Even as the coronavirus pandemic affects virtually every aspect of our lives, it poses specific challenges for healthcare providers trying to manage benefits and compensation policies to best support their employees during these uncertain times.

Healthcare workers on the front lines of the COVID-19 crisis are fighting around the clock to keep critically ill patients alive despite shortages of masks and other crucial personal protective equipment (PPE). Many workers have fallen ill, been forced to indefinitely quarantine or isolate themselves from loved ones, or have even lost their lives.

In the face of these daunting challenges, hospitals, clinics, and other healthcare organizations are adjusting their benefits and compensation policies. In doing so, they must navigate complex issues like hazard pay and workers’ compensation, as well as rapidly shifting guidelines and legislation from federal, state, and local governments.

Hazard pay or other incentives for frontline workers

There has been widespread discussions at local, state, and federal levels regarding hazard pay—sometimes referred to as “battle pay” or “heroes’ pay”—for workers deemed essential during the COVID-19 pandemic. The U.S. Department of Labor defines hazard pay as “additional pay for performing hazardous duty or work involving physical hardship,” but does not regulate what is considered hazard pay or require that employers pay it.¹

Many local governments around the country have approved hazard pay for various types of frontline workers. States, including Vermont and Massachusetts have considered enacting their own legislation. Meanwhile, a growing number of policymakers have called on the federal government to include funding for hazard pay in future stimulus bills. ^2,3,4,5,6

At the employer level, many healthcare organizations are considering offering hazard pay or some other incentive for workers who have an increased risk of exposure to COVID-19. Though a majority of the medical facilities surveyed in the Milliman Northwest Healthcare COVID-19 Pulse Survey have not implemented hazard pay, 23% have or are considering it, especially if staffing becomes an issue. Another 25% are considering other special incentives for workers with increased exposure to the coronavirus, including weekly bonuses or some form of “recognition pay.”⁷

Some healthcare employers reported working with unions to formulate incentives for workers who are exposed to COVID-19. Labor unions in the Northwest are seeking to protect their members in various ways, from demanding hazard pay and sufficient PPE to negotiating free hotel stays for healthcare staff forced to quarantine from their family.^8,9,10

Workers’ compensation

Many healthcare providers are encouraging workers who have tested positive for the coronavirus to apply for workers’ compensation to cover medical care, lost wages, and other expenses. More than 40% of respondents in the Milliman survey reported advising employees to apply for workers’ compensation, while another 32% of respondents have considered other leave benefits such as "quarantine pay" or short-term housing.

Though workers’ compensation is mandatory for most businesses across the country, states have different policies about what is considered occupational illness or disease. Workers need to prove they were infected on the job in order to qualify for workers’ compensation benefits, which can be extremely difficult in the case of COVID-19. A number of states, including Minnesota, Illinois, and Alaska, are considering changing workers’ compensation rules in order to ensure coverage to frontline workers.¹¹

Equal employee treatment regardless of known exposure

As the issue of workers’ compensation reveals, it’s often difficult—if not impossible—to determine when a healthcare worker may have been exposed to the coronavirus. To reflect this uncertainty, a majority of respondents (64%) in the Milliman survey are approaching all employees with positive test results in the same way, whether or not they have direct COVID-19 patient care responsibilities.

In terms of quarantining exposed employees and determining when they can come back to work, many employers said they follow the guidelines issued by the Centers for Disease Control and Prevention (CDC). After initially mandating quarantining for 14 days, the CDC issued new guidelines in April 2020 designed to get exposed workers in critical fields back to work faster.¹²

Mandating (or capping) overtime hours

Another issue facing healthcare organizations battling COVID-19 is overtime, both in terms of mandating overtime hours to ensure adequate staffing and capping overtime to protect workers and keep budgets in check. The majority (84%) of employers surveyed by Milliman are not mandating overtime for clinical staff. Of the 13% that are planning to do so in the future, some reported requesting volunteers, while others said they are waiting for a surge in COVID-19 patients to take that step.

Very few employers reported capping overtime hours for either clinical or non-clinical workers. In fact, some organizations reported having to furlough or lay off workers in non-COVID-related areas. Many hospitals and clinics have had to postpone or cancel elective surgeries due to COVID-19, even as people avoid seeking medical care in all but the most urgent cases for fear of being exposed. With revenues falling, many facilities have had to furlough thousands of workers and reduce salaries for many others, including emergency department staff.¹³

Shifting staff

To minimize layoffs and ensure adequate staffing in departments dealing directly with COVID-19 patients, many healthcare organizations are shifting underused staff to COVID-19 services. Fifty-six percent of the employers Milliman surveyed reported shifting their staff during this crisis, either through assigning staff members or asking for volunteers to perform key services, such as screening patients before entrance, staffing walk-in clinics, taking employees’ temperatures, or working pharmacy curbside pickup.

“We’re not furloughing staff or laying off staff,” Swedish Health Services CEO Guy Hudson told the Puget Sound Business Journal of his organization, which employs approximately 10,000 healthcare workers in Washington state.¹⁴ “We are actually working with them to find them other areas of work, so they can stay employed and support their families as we work through this crisis.”

Changing sick leave or paid time off (PTO) policies

The Families First Coronavirus Response Act (FFCRA) requires that employers with fewer than 500 employees provide up to 12 weeks of paid leave, a policy that covers both medical reasons (if an employee is quarantined and/or experiencing COVID-19 symptoms) and the need to care for children under 18 if their school or child care provider has been closed.¹⁵

Many healthcare employers are changing their own sick leave or PTO policies to reflect the reality of the pandemic. More than half (55%) of employers surveyed report changing or considering making changes to their sick leave policies, while a smaller percentage (42%) are changing or considering changing their PTO policies.

Among steps organizations have taken or are considering are allowing employees to incur a negative sick leave or PTO balance, banking additional sick days specifically related to COVID-19, and allowing employees to take sick time for self-quarantining or caring for their children.

Offering child care benefits or other incentives

The FFCRA’s provision to allow paid leave to employees for the purpose of child care reflects the difficult situation many parents and guardians are facing with schools and child care providers all over the country closing during the pandemic.

In the survey, 25% said they were offering or considering expanded child care benefits to meet this challenge. Some examples include daily or weekly stipends, opening more slots in on-site children’s centers, expanding centers to include school-age children, and providing safe, supervised spaces for staff to bring their children to work. Some providers said they were coordinating with local community organizations and schools to make temporary child care available for workers who need it.

Beyond child care, many healthcare employers surveyed said they were considering various other initiatives to support their employees, such as continuing benefits for reduced-hour or furloughed employees, opening employee assistance funds, and providing daily boxed lunches.

Understandably, many employers are placing an emphasis on the mental health and well-being of their employees. Some organizations in the survey reported making counseling available to staff members struggling with the psychological burdens related to the pandemic. This is offered both on site and remotely. “We are really trying to focus on wellness,” one respondent reported. “We know this is a very stressful and depressing time for our employees.”

From hazard pay to mental health, the coronavirus pandemic is revealing the need for healthcare employers—and all employers—to take a flexible, people-centered approach. When managing benefits and compensation, organizations must ensure that their employees know they will help them navigate this difficult period.

¹“Hazard Pay,” U.S. Department of Labor. Retrieved on April 30, 2020. https://www.dol.gov/general/topic/wages/hazardpay.

²Escobedo, Jozelyn, “LIST: Frontline workers in North Texas receive hazard pay during COVID-19 pandemic.” WFAA.com, April 16, 2020. Retrieved April 30, 2020. https://www.wfaa.com/article/news/health/coronavirus/hazard-pay-approved-for-essential-workers-during-coronavirus-pandemic/287-ee5f1c67-88af-435e-9535-ded24dd8cb75

³Hunter, George, Mike Martindale and Beth LeBlanc, “COVID-19 'hazard pay' stirs fight to spread cash to more public workers.” Detroit News, April 10, 2020. Retrieved on April 30, 2020. https://www.detroitnews.com/story/news/local/michigan/2020/04/10/covid-19-hazard-pay-fight-cash-more-public-workers/5124306002/

⁴ “Vt. lawmakers consider giving frontline workers 'hazard pay.'” WCAX.com, April 1, 2020. Retrieved on April 30, 2020. https://www.wcax.com/content/news/Vt-lawmakers-consider-giving-frontline-workers-hazard-pay-569286421.html

⁵Cho, Diane and Mary Markos, “Health Care Workers in Mass. to Receive Hazard Pay Amid Coronavirus Pandemic.” NBC Boston, April 13, 2020. Retrieved on April 30, 2020. https://www.nbcboston.com/news/local/health-care-workers-in-mass-to-receive-hazard-pay-amid-coronavirus-pandemic/2106619/

⁶Nathan Wood, “Healthcare workers deserve hazard pay during covid-19 pandemic.” Washington Post, April 3, 2020, Retrieved on April 30, 2020. https://www.washingtonpost.com/health/health-care-workers-deserve-hazard-pay-during-covid-19-pandemic/2020/04/03/6d552ea2-742f-11ea-a9bd-9f8b593300d0_story.html

⁷Milliman Northwest Healthcare COVID-19 Pulse Survey, April 2020.  

⁸“Unions demand hazard pay for health care workers.” United Food and Commercial Workers (UFCW) press release, April 7, 2020. Retrieved on April 30, 2020. https://www.ufcw21.org/news/2020/4/8/unions-demand-hazard-pay-for-health-care-workers

⁹ “WSNA calls for PPE solution before elective procedures restart,” Washington State Nurses Association (WSNA), April 22, 2020. Retrieved on April 30, 2020. https://www.wsna.org/news/2020/wsna-calls-for-ppe-solution-before-elective-procedures-restart

¹⁰“Hotel rooms for nurses and health care workers available in Seattle and Bellevue.” Washington State Nurses Association (WSNA), April 10, 2020. Retrieved on April 30, 2020. https://www.wsna.org/news/2020/hotel-rooms-for-nurses-and-health-care-workers-available-in-seattle-and-bellevue

¹¹ Gold, Russell and Leslie Scism, “States Aim to Expand Workers’ Compensation for Covid-19.” Wall Street Journal, April 27, 2020. Retrieved on April 30, 2020. https://www.wsj.com/articles/states-aim-to-expand-workers-compensation-for-covid-19-11588011257

¹²Sullivan, Peter, “CDC issues new guidance for essential workers exposed to coronavirus.” The Hill, April 8, 2020. Retrieved on April 30, 2020. https://thehill.com/policy/healthcare/491912-cdc-issues-new-guidance-for-essential-workers-exposed-to-coronavirus

¹³Luhby, Tami, Sonia Moghe, Natasha Chen and Jasmine Wright, “Some ER doctors are losing pay and hours even as coronavirus rages.” CNN, April 8, 2020. Retrieved on April 30, 2020. https://www.cnn.com/2020/04/08/politics/emergency-doctors-hospitals-losing-pay-covid/index.html

¹⁴Campbell, Megan, “'Some may not survive': Swedish CEO concerned for the future of WA hospitals.” Puget Sound Business Journal, April 24, 2020. Retrieved on April 30, 2020. https://www.bizjournals.com/seattle/news/2020/04/24/some-may-not-survive-swedish-ceo-concerned-for-the.html

¹⁵ Families First Coronavirus Response Act: Employer Paid Leave Requirements,” U.S. Department of Labor.“ Retrieved on April 30, 2020. https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave