Florida Legislature Discussing Workers’ Compensation Premium Changes
As all Florida businesses large and small come to the realization that their workers’ compensation premium has increased almost 15% as of December 1st, 2016, most of them are completely unaware that this increase is only the beginning of additional increases if the Florida legislature does not take action this session to alleviate the effects of the Florida Supreme Court decisions that were handed down in 2016.
Business groups including Associated Industries of Florida (AIF) and the National Federation of Independent Business have formed the Florida Workers’ Compensation Strategic Task Force to seek input from the general public as well as businesses. Recently, Associated Industries attorney Jim McConnaughhay provided some updated statistics from the Florida Senate Banking & Insurance Committee that appears to confirm that the concerns from the business community and general public appear to be warranted. Mr. McConnaughhay indicated the following cost impact to the workers’ compensation system after the Florida Supreme Court decisions in 2016.
- Premium costs have increased by an average of 14.5%
- Claims for benefits filed by attorneys have increased by over 20%
- Estimated $1 billion in unfunded liability on the insurance industry
- The average attorney fee prior to the Florida Supreme Court decisions was $4,095. After the decisions, the average has increased up to $4,978. A total of $15,600,000 additional attorney fees paid since these decisions.
- Florida moved up from 33rd to 23rd on the list of most expensive states for workers compensation costs. (1)
The task force has proposed multiple changes to the insurance committee including a change in the way attorney fees are paid. The proposal would eliminate limits on attorney fees but the fees would be paid by the injured employee similar to other areas of our legal system rather than being paid by the employer or insurance carrier. Not surprisingly, this was met with criticism from the plaintiff bar otherwise known as the Florida Justice Association. The FJA contends that this and other proposals are simply the insurance industry attempts to justify rate increases which, does not seem to make much sense since the proposals are designed to lower rates. We intend on following this process closely to see what if anything the legislature can get done over the coming weeks.
Tom Murphy is a workers’ compensation and medical malpractice insurance specialist agent with the firm of Danna-Gracey, Inc. in downtown Delray Beach. He can be reached at (561) 276-3553 or (800) 966-2120 or [email protected].