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.
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.”