Workers’ Comp Rates Decrease 1.8 Percent Next Month

 

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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 cjohnson@flchamber.com.

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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Citizens’ Rate Increase Further Proof AOB Reform Needed

Citizens Property Insurance Corp.’s proposed statewide rate increases is further proof that Assignment of Benefits (AOB) abuse is hurting homeowners and must be addressed during the 2017 legislative session, the Consumer Protection Coalition said today.

During a rate hearing before the Florida Office of Insurance Regulation today, Citizens said its recommended 6.8 percent rate increase for personal lines policies was necessary to offset an explosion in non-weather-related water loss claims. In many of the claims, a homeowner signed an AOB enabling an unscrupulous home repair vendor to take over the policy, inflate the cost of the claim and file a lawsuit against the insurance company if it disputed the bill.

“It’s unfortunate that Citizens is here today requesting a rate increase because of a legalized scam that allows the bad behavior of a few to punish everyone,’’ said MARK WILSON, President and CEO of the Florida Chamber of Commerce, which spearheads the Consumer Protection Coalition. “The coalition has been warning that AOB abuse would directly hit consumers’ wallets, and, regrettably, our fears are coming to fruition.’’

The broad-based coalition of business leaders, consumer advocates, real estate agents, insurance groups and others formed in January to raise awareness about the dangers of AOB abuse and need for reform. The coalition believes that abusive AOB practices and scams are harmful to consumers and jeopardize Florida’s business-friendly environment. The rapidly growing AOB problem also impacts the availability and affordability of insurance, hindering efforts by Citizens, the state-run insurer, to reduce its number of policies and shift homeowners to the private market.

Learn more about today’s hearing by clicking here.

GET INVOLVED:

The Florida Chamber and its Consumer Protection Coalition is sharing your call for AOB reform to stop the fraud and abuse. We’re gaining traction, but need your help to drive the message home. The Florida Chamber and Consumer Protection Coalition is sharing your call for AOB reform to stop the fraud and abuse. Thanks to your support, we’re gaining traction. Help us grow the Coalition by encouraging others to signing this petition.

Citizens’ Rate Increase Request Further Proof of Need for Assignment of Benefits Reform

TALLAHASSEE, Fla. (Aug. 18, 2016) – Citizens Property Insurance Corp.’s proposed statewide rate increases demonstrate beyond a doubt that Assignment of Benefits abuse is hurting homeowners and must be addressed during the 2017 legislative session, the Consumer Protection Coalition said today.

During a rate hearing before the Florida Office of Insurance Regulation, Citizens said its recommended 6.8 percent rate increase for personal lines policies was necessary to offset an explosion in non-weather-related water loss claims. In many of the claims, a homeowner signed an AOB enabling an unscrupulous home repair vendor to take over the policy, inflate the cost of the claim and file a lawsuit against the insurance company if it disputed the bill.

“It’s unfortunate that Citizens is here today requesting a rate increase because of a legalized scam that allows the bad behavior of a few to punish everyone,’’ said MARK WILSON, president and CEO of the Florida Chamber of Commerce, which spearheads the coalition. “The coalition has been warning that AOB abuse would directly hit consumers’ wallets, and, regrettably, our fears are coming to fruition.’’

The broad-based coalition of business leaders, consumer advocates, real estate agents, insurance groups and others formed in January to raise awareness about the dangers of AOB abuse and need for reform. The coalition believes that abusive AOB practices and scams are harmful to consumers and jeopardize Florida’s business-friendly environment. The rapidly growing AOB problem also impacts the availability and affordability of insurance, hindering efforts by Citizens, the state-run insurer, to reduce its number of policies and shift homeowners to the private market.

“Citizens is taking the right steps to protect their policyholders should a large hurricane make landfall in the coming months,” said PCI Regional Manager LOGAN McFADDIN, a coalition member. “The last thing Floridians need is another unnecessary cost-driver increasing their insurance expenses as a result of abuse in our current system. We are hopeful this request from Citizens will prompt lawmakers to take a harder look at the problem and stop this type of abuse before it gets worse.’’

During the last legislative session, the coalition pushed for bills that would have added protections to keep homeowners in control of their policies when seeking emergency repairs for a broken kitchen pipe, roof leak or other kind of damage. The group also gathered testimony from actual customers who have been taken advantage of by vendors using AOB to pad their profits.

“This isn’t just a Citizens issue,’’ said MICHAEL CARLSON, president of the Personal Insurance Federation of Florida, and a member of the coalition. “All insurers are feeling the impact, resulting in higher costs for everyone. It’s time to put the bad guys out of business and put consumers back in control of their policies.’’

The coalition has been a vocal supporter of Citizens’ efforts to stop AOB abuse, including its campaign encouraging policyholders to call Citizens first after sustaining damage. Amid rising rates and mounting evidence of AOB abuse, the coalition plans to aggressively seek legislative reform again in 2017.

17.1% Workers’ Comp Rate Increase Will Harm Florida’s Economy/Job Growth

Florida Chamber of Commerce Urges State Leaders to Put Small Businesses and Injured Workers Ahead of Personal Injury Trial Lawyers

IF RATE IS APPROVED, FLORIDA WILL HAVE THE HIGHEST RATES IN THE SOUTHEAST 

TALLAHASSEE, FL (May 27, 2016) – With job creators facing a 17.1 percent workers’ compensation rate increase, the Florida Chamber of Commerce today encourages the Florida Legislature to put small businesses and injured workers before personal injury trial lawyers through whatever means necessary.

The recommended 17.1 percent workers’ comp rate increase, announced earlier today by the National Council on Compensation Insurance (NCCI,) the industry’s provider of workers’ comp analysis and rates, primarily results from a recent Florida Supreme Court ruling that deemed Florida’s attorney fee provision unconstitutional.

The high court’s April 28th action threw out Florida’s attorney fee structure which was originally established in 2003. The 2003 reforms were put in place to help stabilize out-of-control workers’ comp rates which at the time were the highest in the country, and during the last 13 years have helped lower rates nearly 60 percent.

By putting job creators and injured workers first, lawmakers can help prevent businesses from being forced to pay higher rates, and avoid harming Florida’s growing economy and private-sector job growth. With Florida small businesses creating two of every three jobs, this is particularly important and can help prevent employers from choosing between hiring a new worker or paying increased workers’ comp rates.

“We’ve led efforts for more than 10 years to help lower workers’ comp rates by almost 60 percent, and now that personal injury trial lawyers and an activist court are forcing rates to likely skyrocket, we’re not about to back down,” said Mark Wilson, President and CEO of the Florida Chamber of Commerce. “The Florida Chamber will lead the charge to ensure small businesses aren’t crushed under the weight of increased workers’ comp rates, and that workers’ have access to quality healthcare so they can return quickly back to work.”

The Florida Chamber is actively leading the charge to keep workers’ comp working. In fact, the Florida Chamber’s Workers’ Comp Task Force is preparing a legislative remedy, and is coordinating with the best legal minds, along with communicating with legislative and executive leadership.

The Florida Chamber looks forward to continuing to work with Governor Rick Scott and the Florida Legislature to craft a solution to the Florida Supreme Court’s ill-advised and overreaching attempt to legislate from the bench.

The NCCI rate increase recommendation would take effect August 1, 2016 following approval by the Florida Office of Insurance Regulation.

 

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The Florida Chamber of Commerce is the voice of business and the state’s largest federation of employers, chambers of commerce and associations, aggressively representing small and large businesses from every industry and every region. The Florida Chamber works within all branches of government to affect those changes set forth in the annual Florida Business Agenda, and which are seen as critical to secure Florida’s future. The Florida Chamber works closely with its Political Operations and the Florida Chamber Foundation. Visit www.FloridaChamber.com for more information.

Rate Filing Shows Further Decrease in Workers’ Comp Rates

Today, the National Council on Compensation Insurance (NCCI), the industry’s provider of workers’ compensation analysis and rates, announced that they are requesting an average 3.3 percent decrease in workers’ compensation rates, effective January 1, 2015 – a step in the right direction from the 2.5 percent proposed decrease in August.

Despite this reduction, there are still a number of cost drivers in the workers’ comp system. According to a 2013 report by the Department of Financial Services’ three member panel, medical costs, especially those related to hospital inpatient and outpatient services, are a significant cost driver. Although the Florida Legislature did not pass the Florida Chamber-backed bill during the 2014 session that would address rising medical costs by researching an appropriate fee schedule for workers’ comp claims, the Florida Chamber remains committed to continuing our efforts to help pass legislation that reduces rates.

NCCI warns that while they are currently seeking a 3.3 percent rate decrease, court decisions related to Castellanos v. Next Door Company, Westphal v. St. Petersburg, Morales v. Zenith Insurance Company, and Padgett v. State of Florida could dramatically increase rates.

The Florida Chamber of Commerce has filed amicus curiae briefs on the three cases currently before the Florida Supreme Court, and will monitor the appeal of the Padgett case to the Third District Court of Appeal.

This rate decrease still must be approved by the Florida Office of Insurance Regulation. The Florida Chamber will continue to monitor workers’ comp rates, increasing costs in the system and pending litigation that might impact rates.

 

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