Workers’ Comp Rate Increase to Stay in Effect During Appeal

Yesterday evening, the First District Court of Appeals ruled that the 14.5 percent rate increase will continue to be in effect while the Office of Insurance Regulation (OIR) and National Council on Compensation Insurance (NCCI) appeal a case from the Leon Circuit Court last month. This case, brought forward by a trial lawyer, argued that the rate-making process violated Florida’s Sunshine Law. The DCA also granted NCCI’s motion to expedite the case, and set the following timeline:

  • January 11, 2017
    OIR and NCCI must file arguments on the merits of the case
  • January 23, 2017
    James Fee, the trial attorney who brought forward the case, must respond to OIR and NCCI’s filing, and
  • February 2, 2017
    Final briefs must be filed.

What This Means for Florida Businesses:

The Leon Circuit Court in its decision invalidated the rate increase, but the District Court of Appeals allowed the rate to take effect on December 1 for all new and renewal policies. This case is a red herring, meant to distract from the real problem- increased attorney fees as a result of the Castellanos v. Next Door Company Florida Supreme Court decision. In fact, claimant attorney fees are up over 20 percent since the Supreme Court’s decision in April.

 

What’s Next:

Today, the Florida Chamber will testify before the Florida Senate’s Banking & Insurance Committee to fight for a workers’ comp system that works. Share your story with us by contacting cjohnson@flchamber.com today.

Learn how the Florida Chamber of Commerce Workers’ Comp Task Force is working on a legislative solution to the $1.5 billion increase to Florida’s business community.

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.

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