Workers’ Comp Rates Decrease 1.8 Percent Next Month
On May 1, the Florida Office of Insurance Regulation approved a law-only filing that decreases workers’ comp rates by 1.8 percent, effective June 1, 2018. This decrease is the result of the federal tax cut package signed into law at the end of last year, the Tax Cuts and Jobs Act, which produced an increase to many carriers’ profit and contingency margins. In response, the National Council on Compensation Insurance filed a corresponding rate decrease to offset the increases to insurance carriers.
What This Means for You
As a result of federal tax reform, job creators will experience lowered costs of doing business in the form of needed workers’ comp rate relief. However, this relief may only be temporary. The result is modest, albeit temporary, rate relief for businesses across the state of Florida.
It is expected that the National Council on Compensation Insurance will file its annual experience filing in late summer, and rate increases could be on the horizon. The fact remains that while businesses across the state have continued to become safer and the severity of claims have decreased, attorney fees remain a cost driver in Florida’s workers’ comp system. Recent data by the Office of Judges of Compensation Claims show that attorney fees increased by 36 percent over the previous year, and hourly attorney fees have jumped by 200 percent.
The experience rate filing expected in late summer will start to reflect some of this new data as a result of the Florida Supreme Court’s 2016 decision in Castellanos v. Next Door Company.
Join the Task Force
We need your help in pushing legislators to enact meaningful and comprehensive workers’ comp reform by addressing skyrocketing attorney fees. Join the Florida Chamber of Commerce’s Workers’ Compensation Task Force by contacting Carolyn Johnson at (850) 521-1235 or firstname.lastname@example.org.
New Workers’ Comp Data Shows Skyrocketing Fees
Attorney fees in workers’ compensation cases are drastically increasing, according to newly released data from the Office of Judges of Compensation Claims (the Office).
Deputy Chief Judge David Langham presented the new findings during the Florida Chamber’s Capitol Days in Tallahassee.
Just as predicted after the Florida Supreme Court’s ruling in Castellanos v. Next Door Company, the 2016-2017 annual report by the Office shows that attorney fees for injured workers increased by 36 percent over the previous year, totaling $186 million. This amount is the highest in claimant attorney fees that have been paid in over a decade.
Hourly attorney fees jumped by nearly 200 percent- from $25.8 million prior to the court decision to $75 million after. The statutory attorney fee during the same time frame decreased 31 percent.
Adding to the figure is $254 million paid in the defense of workers’ compensation claims. Florida is one of the few states where the employer/carrier pays both defense and injured worker’ attorney fees.
The Florida Supreme Court issued the Castellanos decision in April 2016, which declared the current attorney fee structure unconstitutional. This resulted in a 14.5 percent, or $1.5 billion, increase on Florida job creators. Prior to the Castellanos decision, workers’ comp premiums had decreased by nearly 60 percent after the legislature passed Florida Chamber-backed reforms in 2003 to first address attorney fees.
The Florida House is expected to pass its workers’ comp bill, HB 7009 by Rep. Danny Burgess, later this week. The Senate has not filed major workers’ comp reforms for this session.
Help us create a solution that brings certainty back to employers and workers and join the Workers’ Comp Task Force today!
House and Senate Release Draft Workers’ Comp Plans
Florida Chamber’s Workers’ Comp Task Force Needs Your Review and Feedback
The Florida House and Senate have both released early details of their workers’ compensation plans ahead of Tuesday’s start of the 2017 Florida Legislative Session. Full drafts of these bills are expected later today or before Tuesday, March 7, 2017.
The Florida Chamber of Commerce’s Workers’ Comp Task Force is seeking your input on these draft proposals. Please send the below links to your General Counsel or risk management team member for their immediate review and feedback.
The House will workshop their draft proposal on Tuesday, March 7, 2017, in the House Insurance and Banking Subcommittee. It’s unknown at this point when the Senate will workshop or hear their workers’ comp proposal.
Links to the proposals can be found here:
The Florida Chamber Workers’ Comp Task Force reconvened last year to address rising workers’ comp costs as a result of the Florida Supreme Court’s decisions in Castellanos and Westphal. On December 1, 2016, for all new and renewal policies, workers’ comp rates increased by 14.5 percent, with the majority of that rate increase due to the removal of attorney fee caps.
Email me at email@example.com with your company’s thoughts on the House and Senate proposals.
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.
19.6% Workers’ Comp Rate Increase Could Jeopardize Florida’s 59 Month Job Growth Streak
Increased Costs Likely to Force Small Businesses to Choose Between Paying Higher Workers’ Comp Rates and Hiring New Employees
TALLAHASSEE, Fla. (July 1, 2016) – Florida’s 59 consecutive months of private sector job growth may soon be in jeopardy as job creators prepare for a proposed 19.6 percent workers’ compensation rate increase, the Florida Chamber of Commerce said today.
The recommended 19.6 percent workers’ comp rate increase, proposed effective beginning October 1, was announced earlier today by the National Council on Compensation Insurance (NCCI,) the industry’s provider of workers’ comp analysis and rates. The increase results from two recent Florida Supreme Court rulings that deemed Florida’s attorney fee provision unconstitutional (Castellanos v. Next Door Company), and declared the current cap for temporary total disability (104 weeks) unconstitutional (Westphal v. City of St. Petersburg).
According to the release by NCCI, “NCCI estimates that the impact of Westphal will be an increase in overall Florida workers compensation system costs of +2.2%.”
If the rate filing is approved as filed increasing rates by 19.6 percent, Florida will have the highest premiums in the Southeast.
The Florida Chamber believes the Florida Legislature must address this rate increase to avoid harming Florida’s growing economy and private-sector job growth.
The Florida Chamber’s Workers’ Compensation Task Force has been engaging Florida’s highest elected leaders since last year, preparing them for this outcome, and advocating for a legislative solution. In addition to the Florida Chamber’s Workers’ Comp Task Force meetings, eight regional meetings have already taken place, and our local chamber federation is actively engaged – assessing the impact it will have on businesses in their communities and joining efforts toward solutions.
“Small businesses create two of every three jobs in Florida, and a workers’ comp rate increase as significant as this could force these businesses to choose between paying higher workers’ comp rates and hiring new employees,” said Mark Wilson, President and CEO of the Florida Chamber of Commerce. “A 19.6 percent rate increase will cause uncertainty among job creators and may even force a decline in Florida’s job growth.”
The Florida Chamber has a 13 year history of leading efforts to help lower workers’ comp rates by nearly 60 percent, and is committed to leading the charge moving forward to ensure affordable rates despite personal injury trial lawyer efforts to make more money off the system.
“It’s clear that Florida’s workers’ comp system is under attack,” Wilson added. “A legislative solution will help bring certainty back to Florida’s job creators and injured workers that Florida’s workers’ comp system is working.”