Insurance authority warns school districts to comply with public health guidelines

State group tells districts that COVID-19-related work claims could be in jeopardy

The New Mexico Public School Insurance Authority board voted unanimously Thursday to send a letter to member districts and charter schools warning that if they do not comply with state-led initiatives to safely send kids back to school, they may jeopardize their chances of getting coverage for COVID-19-related work claims.

The authority’s action speaks to the dilemma insurers face as they navigate “unchartered water regarding insurance coverage during a global pandemic,” Marty Esquivel, general counsel for the authority, told the board during the virtual meeting.

He voiced concerns there “may be a situation where some districts choose to circumvent the order intentionally or unintentionally and the question becomes, what happens in that case?”

The authority is trying to determine how to ensure insurance coverage for schools in the face of COVID-19. One idea being considered is to set aside $1 million for liability insurance for schools dealing with virus-related cases.

The board also approved the creation of a task force to study questions and challenges related to the virus, which has made parents, employees and students wary about returning to school this fall.

Gov. Michelle Lujan Grisham announced late last month that students and staff would not be returning to campuses until at least after Labor Day weekend of Sept. 7. Students will begin remote learning in many school districts Aug. 20.

The authority, which provides insurance for all school district in New Mexico except for Albuquerque Public Schools, has spent part of this week looking at a variety of issues related to COVID-19. Among the most difficult: How to deal with workers compensation claims.

Executive Director Richard Valerio said Thursday the authority already has received several workers compensation claims tied to the virus.

“They were denied because we could not determine the employee caught the COVID virus from the workplace,” he said. “I think it’s gonna be really hard to pinpoint or determine that, though contract tracing may come into play there.”

Valerio said districts that violate state orders — such as bringing students back to schools before being cleared by the governor, ordering employees back to school even if the Public Education Department allowed for exceptions for nonessential employees or violating rules on mask-wearing — could be at risk of losing their coverage.

David Poms, a consultant for the authority, said

Wednesday that insurance carriers may have a difficult time figuring out whether an employee or student contracted the virus at a school.

He said historically workers compensation claims from employees who catch colds, the flu or other communicable diseases are often denied “because there was no definitive way of determining where they got the disease or cold or flu. It’s very, very problematic.”

Poms said legal and insurance questions revolving around any COVID claim could be “catastrophic for any payor — the insurance company, state government or federal government if a child goes to school, that child goes home, gives COVID to family members, [those] family members pass away or have serious medical expenses and then they in turn file a lawsuit against their employer.”