Workers’ Comp Rate Goes Into Effect

Total Costs Resulting From Court Rulings to Top $1.5 Billion

Today, December 1, 2016, workers’ compensation rates will increase by 14.5 percent for all new and renewal policies, an increase which equates essentially to a $1.5 billion transfer of wealth from Florida businesses to trial lawyers the Florida Chamber of Commerce said.

“Today, job creators across Florida are opening their doors and facing a $1.5 billion tab that is not about employee safety or protecting workers, but about increasing compensation for plaintiff trial lawyers,” said CAROLYN JOHNSON, Director of Business, Economic Development & Innovation Policy for the Florida Chamber of Commerce.

Prior to the Thanksgiving holiday, a Leon Circuit Court judge voided the 14.5 percent rate increase under the grounds that the National Council on Compensation Insurance and the Office of Insurance Regulation did not follow the requirements of the “Sunshine Law.” This decision has since been appealed, meaning the rate increase will take effect today.

“Many businesses are telling us they will be forced to delay hiring, or even cut existing jobs, in order to cover this increase in their premiums,” said JOHNSON. “A rate like this puts Florida’s competitiveness and job creation directly at risk.”

According to research from a Florida Chamber Workers’ Compensation Task Force survey, of the businesses impacted by the rate increase, 90 percent said the impact is significant. An overwhelming 96 percent of those surveyed believe that the Florida Legislature should take action to remedy the Supreme Court decisions that resulted in a 14.5 percent increase.

This $1.5 billion increase is the result of two Florida Supreme Court decisions earlier this year declaring portions of Florida’s workers’ comp system unconstitutional. In one case in particular, 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. And although the rate officially increases today, since the decision in April, the number of lawsuits and trial lawyer pay-days have already increased.

The Florida Chamber has a long history of helping to keep Florida’s workers’ comp system working. As a result, workers’ comp rates were lowered by more than 60 percent in the last 13 years, and injured workers returned to work 10 days faster. Those efforts continue today with the Florida Chamber’s Workers’ Compensation Task Force, which is working to secure a legislative fix.

In Case You Missed It:

 

Division of Workers’ Comp Wants Your Input on Rate Increase

$1.5 Billion Workers’ Comp Increase Takes Effect December 1

December 1, workers’ compensation rates will increase by 14.5 percent for all new and renewal policies, an increase which equates essentially to a $1.5 billion transfer of wealth from Florida businesses to trial lawyers. This is your chance to share with the Division of Workers’ Comp your thoughts on how to fix Florida’s current workers’ comp system. If the business community does not weigh in, plaintiff trial lawyers, not job creators, will inform the Division’s proposed recommendations. Please take a few minutes to provide your feedback. The survey closes Thursday, December 8, 2016.

Background:

This $1.5 billion increase is the result of two Florida Supreme Court decisions earlier this year declaring portions of Florida’s workers’ comp system unconstitutional. In one specific ruling, the Court said a plaintiff trial lawyer could receive $38,000 in attorney fees for a case in which the injured worker’s injuries totaled $800. That’s $800 for the injured worker and $38,000 for the trial lawyer and higher rates for everyone.

Prior to the Thanksgiving holiday, a Leon Circuit Court judge voided the 14.5 percent rate increase under the grounds that the National Council on Compensation Insurance and the Office of Insurance Regulation did not follow the requirements of the “Sunshine Law.” This decision has since been appealed, allowing the rate increase to take effect today, as planned.

While a delay sounds like it would have been great for businesses, the reality was that a rate increase was looming on the horizon. As I told the media last week:

“This might sound like a victory, but Florida businesses shouldn’t be fooled by this classic trial lawyer tactic. The rates may not go up on December 1st, but this is only temporary. What won’t stop, however, is that trial lawyers will use this time to continue enjoying the benefit of unlimited legal fees in workers’ comp cases, while they are also seeking higher attorney fees for claims retroactively impacted as far back as July 2009. It’s a lucrative deal for billboard trial lawyers.”

Join the Florida Chamber Workers’ Comp Task Force:

The Florida Chamber remains committed to addressing the Supreme Court’s decision when the Florida Legislature convenes in March. The Florida Chamber Workers’ Comp Task Force has been working on this remedy, as well as educating businesses on this rate increase.

Workers’ Comp Rate Finalized and Total Costs Resulting From Court Rulings to Top $1.5 Billion

Tallahassee, Fla. (Oct. 4, 2016) – A workers’ compensation rate increase finalized today will top more than $1.5 billion, and force Florida job creators to pay higher premiums designed to  benefit billboard trial lawyers – not injured workers, the Florida Chamber of Commerce said.

The National Council on Compensation Insurance (NCCI) today accepted the Florida Office of Insurance Regulation’s recommended 14.5 percent workers’ comp rate increase, and took necessary steps to begin assessing the increased rates on December 1 for new and renewal policies.

“Job creators across Florida will now be forced to pick up a $1.5 billion tab that, disturbingly is not about employee safety or protecting workers – it’s about increasing compensation for plaintiff trial lawyers,” said MARK WILSON, President and CEO of the Florida Chamber of Commerce.

“A rate increase this big, this sudden, hurts Florida’s competitiveness and employers large and small. Many businesses will be forced to delay hiring – or even cut existing staff – to cover this leap in their workers’ comp premiums,” WILSON added.

ICYMI: Let’s fix workers’ comp in Florida. (Tampa Bay Times, September 30, 2016)

The 14.5 percent workers’ comp rate increase follows two Florida Supreme Court decisions declaring portions of Florida’s workers’ comp system unconstitutional. In one case in particular, 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.

Last week during the Florida Chamber’s Future of Florida Forum, Senator Bill Galvano and Representative Kathleen Passidomo discussed this issue with Florida Chamber Workers’ Comp Task Force Co-Chair Steve Knopik, CEO of Bealls, on the Florida Chamber’s Bottom Line.

“It’s important that we educate the new members in the legislature who maybe didn’t live through those reforms (2003 reforms) at that time, make sure that the voice of the Florida Chamber is heard in those deliberations and make sure you understand who the decision makers are in that process,” said SENATOR GALVANO.

“I think it’s important that we hit it early on, look at it globally, make the change that needs to be made, and it’s not redoing the entire statute, but addressing the Supreme Court’s rulings and do it as soon as possible,” said REPRESENTATIVE PASSIDOMO.

The Florida Chamber has a long history of helping to keep Florida’s workers’ comp system working. As a result, workers’ comp rates lowered by more than 60 percent in the last 13 years, and injured workers returned to work 10 days faster. Those efforts continue today with the Florida Chamber’s Workers’ Compensation Task Force which is working to secure a legislative fix.

 

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Putting Injured Workers And Job Creators First, Not Trial Lawyers Is the Right Thing To Do To Keep Florida’s Workers’ Comp System Working

 

September 29, 2016

Attention Florida business owners—in case you missed it, you are about to be hit with a workers’ compensation insurance increase that you most likely haven’t planned for, all for the benefit of Florida’s billboard trial lawyers.

This week, the Florida Office of Insurance Regulation approved a 14.5 percent workers’ compensation rate increase that takes effect December 1 for new and renewal policies, the fallout from two damaging Florida Supreme Court decisions, Castellanos and Westphal.

A rate increase this big, this sudden, hurts Florida’s competitiveness and employers large and small. Many businesses will be forced to delay hiring – or even cut existing staff – to cover this leap in their workers’ comp premiums.

The increase is also a direct blow to Florida’s business-friendly climate and jeopardizes the 62 consecutive months of private-sector job growth we’ve experienced.

Let’s rewind back to 2003. At that time, Florida had the second-highest workers’ comp rates in the United States. These rates were threatening our state’s competitiveness. In response, the Florida Chamber of Commerce joined with then-Governor Jeb Bush to pass a series of common-sense legislative reforms.

These reforms have become a national success story. Since enactment, Florida’s workers’ comp rates dropped approximately 60 percent, while at the same time injured workers got the care they needed more quickly and were able to return to work an average 10 days sooner than in the past.

But the Supreme Court rulings, issued earlier this year, have jolted job creators and threaten to unravel all the great progress our state has made over the past 13 years.

The most damaging of the two court rulings overturned reasonable attorney fee caps that were established to stop trial lawyers from using often minor workplace injuries as a means for suing businesses in hopes of hitting the jackpot on fee awards.

Florida’s insurance regulators had little choice but to approve the sudden rate hikes we’re seeing now because they forecast that the court’s approval of runaway legal fees is retroactive and will set off a tidal wave of trial lawyers refiling old cases and concocting new ones.

The worst part of this mess is that it isn’t about improving safety or care for injured workers. It’s been thoroughly documented that the 2003 reforms succeeded in getting workers well and back to work faster, while eliminating unnecessary legal costs. The only group benefiting from this ruling is the trial lawyers.

In fact, in Castellanos, the trial lawyer argued for $38,000 in attorney fees in a case in which the injured worker was awarded only $800 – and the Supreme Court now says those fees are acceptable.

We urgently need a legislative solution to address this looming crisis. Our goal must be to ensure that injured workers continue to receive access to quality care and the court system, while providing job creators cost controls and the benefits of reining in outrageous attorney fees.

The Florida Chamber is actively leading the charge to help lower workers’ comp rates once again. Our Workers’ Compensation Task Force has been engaging Florida’s highest elected leaders, working with the brightest legal minds and coordinating with other states to develop the right solution. We are also working closely with business leaders and local chambers throughout the state to ensure that Florida’s success story does not unravel and become a nightmare again.

Putting injured workers and job creators first, not trial lawyers, is the right thing to do to keep Florida’s workers’ comp system working.