State Regulators Increase Workers’ Comp Rates by 14.5 Percent
Green Lights Plaintiff Trial Lawyers to Increase Their Compensation
Following the encouragement of many in the business community to make Florida’s workers’ compensation rate as actuarially sound as possible, state regulators today announced a 14.5 percent increase – an increase that green lights plaintiff trial lawyers to increase their own compensation on the backs of job creators, the Florida Chamber of Commerce said.
“Putting job creators and injured workers first is the right thing to do to keep Florida’s workers’ compensation system working. Unfortunately, the Florida Supreme Court’s ruling is not about safety or protecting workers. The effect of the Castellanos decision is to raise costs for no other reason than so plaintiff trial lawyers can raise fees,” said MARK WILSON, President and CEO of the Florida Chamber of Commerce.
The Florida Office of Insurance Regulation today contingently approved the 14.5 percent workers’ comp rate increase following two Florida Supreme Court decisions that declared portions of Florida’s workers’ comp system unconstitutional. In one case in particular, Castellanos, the plaintiff argued that the plaintiff trial lawyer should receive $38,000 in attorney fees for a case in which the injured worker was awarded only $800. That’s $800 for the injured worker and $38,000 for the trial lawyer. This accounts for nearly two-thirds of the rate increase.
The increase follows a mid-August public hearing in which the Florida Chamber’s Wilson testified saying:
“…this will have a negative impact on Florida’s business climate. It will likely impact Florida’s 61 consecutive months of job growth. And perhaps most disturbing, is that this will be a self-inflicted wound that advantages trial lawyers instead of workers.”
For employers, the nearly 15 percent rate increase – which takes effect December 1, 2016 for new and renewal policies – is particularly troublesome because many small businesses haven’t budgeted for dramatically higher rates. For Debbie Harvey, CEO of Ron Jon Surf Shop and Co-Chair of the Florida Chamber’s Workers’ Comp Task Force, the 14.5 percent workers’ comp increase means the famous surf shop will no longer be able to add a new, mid-level employee to their team next year.
“This isn’t an outlier story. Unfortunately, this is the impact an increase of this magnitude could have on businesses – making them choose between hiring new employees or paying higher workers’ comp premiums,” said MARK WILSON, President and CEO of the Florida Chamber.
A legislative solution for both court cases is needed to help keep rates affordable for job creators.
The Florida Chamber has a long history of helping to keep Florida’s workers’ comp system working. In the last 13 years, the Florida Chamber has led efforts to help lower rates by nearly 60 percent. Since the 2003 workers’ comp reforms were enacted, injured workers returned to work 10 days faster.
Those efforts continue today, as the Florida Chamber’s Workers’ Compensation Task Force has been engaging Florida’s highest elected leaders and working with top legal minds to develop the right solution. In addition to task force meetings, regional meetings have taken place across Florida, and our local chamber federation is actively engaged – assessing the impact it will have on local businesses, and joining efforts toward solutions.
The Florida Chamber’s Workers’ Comp Task Force is co-chaired by Debbie Harvey, CEO of Ron Jon Surf Shop and Steve Knopik, CEO of Bealls Inc. Steve Knopik will be leading a panel discussion at this week’s Future of Florida Forum on workers’ comp with Senator Bill Galvano and other legislative leaders.
ICYMI: Q&A: Business task force leaders argue for a Florida workers’ compensation fix, Tampa Bay Times.