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Following the lock-down era of COVID-19 from 2020 through 2022, there has been an increased emphasis on mental health across industries, and workers’ compensation law is now at the forefront.
In recent months, states across the nation have passed laws that cover non-physical stress-related injuries if it can be proven the condition was tied to the job an employee was performing. A recent focus has been on first responders such as firefighters, police officers and emergency care providers who experience post-traumatic stress disorder (PTSD) as part of their work in the field.
For example, the Montana Legislature recently passed Senate Bill 394 to provide workers’ compensation coverage of PTSD for first responders without the requirement of a physical injury. In June, it was vetoed by Governor Greg Gianforte, in part, because it would increase costs to the workers’ compensation system through higher premiums.
In New York, employers and insurers have a keen eye on the workers’ compensation system because of the impact of a new law and subsequent amendment that will allow all workers—not just first responders—to file claims for mental injuries. As one of the most populated states in the nation, New York often sets the tone for the rest of the country when it comes to these types of claims.
A shifting landscape
In addition to the PTSD experienced by first responders, the focus on workplace stress has intensified amid increases in workplace violence.
“New Yorkers work hard—and those who have experienced the unthinkable while on the job deserve to be treated fairly,” Gov. Kathy Hochul said at a December, 2024, press conference. “The mental health crisis our country has experienced since the COVID-19 pandemic is unprecedented, and we need to do everything in our power to lend a hand to those in need. I’ll never stop fighting for the working people of New York.”
On December 6, 2024, Hochul signed legislation amending Section 10 of the Workers’ Compensation Law with respect to claims for mental injuries resulting from work-related stress. On February 14, 2025, the governor signed a chapter amendment to this legislation stating that covered employees must demonstrate their mental disorder arose out of “extraordinary work-related stress attributable to a distinct work-related event or events directly related to the employment and occurring during the performance of the employees’ job duties.”
The amended law went into effect June 4. This means these issues will imminently start to come before the New York Workers’ Compensation Board and its judges. Once these proceedings take place and cases are decided, a clearer picture will emerge about what constitutes “extraordinary” and what exactly the “distinct work-related event or events” are that will lead to successful mental health-related workers’ compensation claims.
While this impact will largely be felt in court proceedings, there are considerations insurance carriers and risk managers will need to enact to protect their corporate clients and, more importantly, help their clients properly support their employees.
What insurers should do
The new workers’ compensation law and amendment will likely create an opportunity for more employees in New York to file mental health claims. To prepare for a potential spike in claims, carriers and risk managers should future plan and think past the initial filing itself. One way to do this is to think about how employers work with employees as a whole. This includes ensuring there are proper resources in place, such as Employee Assistance Programs (EAPs), mental health treatment options, and support for employees who are struggling.
While it is important to take care of injured workers, it still is likely questionable claims will arise. To prepare for and mitigate such questionable claims, insurers should:
- Consider what their response to these claims will be, open their playbook and respond categorically to each questionable claim.
- Have a plan for preparing and advising human resources directors, supervisors, managers, clients and others about mental health workplace topics.
- Develop policies and procedures to handle the new law/amendment correctly.
- Create a playbook to help clients care for the employees while, at the same time, not opening the door for new claims.
Industry-wide Considerations
While there is more risk involved with the new workers’ compensation law in New York, it can lead to positive developments in the insurance space, including more transparent conversations around ways to support employee mental health. Risk managers and carriers giving more consideration to mental health support for the workforce is a step in the right direction.
Consider the recent return-to-office movement. A swift re-entry may be a productive move for one worker who is social and can’t wait to see their work friends. For another, a quick change away from remote work may lead to anxiety and stress. Having procedures in place to offer workers a more gradual re-entry could benefit their mental health.
The new law also will prompt insurers to innovate, especially in the form of early intervention programs. As use cases for artificial intelligence (AI) continue to grow, consider using the technology to help clients look at their workforce metrics. Are stress-related claims coming from certain departments, locations or positions more than others? Employers can use those metrics and partner with professionals who can help workers deal with stress before it gets to the point where a claim could be filed.
While insurers and employers will be in wait-and-see mode about the new law until judges start ruling on claims, they don’t have to wait to find new ways to support employees and their mental health. Legal counsel and risk managers alike can monitor for additional updates, and work closely with legislators, judges, clients and others to clarify how the term work-related stress is now interpreted. It will also be vital to closely watch any upcoming mental injury workers’ compensation cases or decisions made on mental health injuries to prepare for the potential influx of newly filed claims.
Change may be coming to the workers’ compensation landscape, but insurers who are prepared and have the right programs in place won’t be caught by surprise. Monitor for legislative changes, partner with the right legal counsel for sound advice, and perhaps most importantly, put the well-being of workers first. A prepared, worker-first mentality will always find success.
Sarah Thomas is managing partner at Jones Jones LLC where she leads the firm through the evolving technicalities of workers’ compensation and insurance defense law. She can be reached at 212.776.1808 or https://jonesjonesllc.com.
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