Florida Workers’ Comp Rates Going Up Nearly 15%

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By Tom Murphy

Less than two months ago I wrote an article titled “Prepare for Increase in Workers’ Comp Premiums.” It is official: The Florida Office of Insurance Regulations (OIR) has issued its final order approving the National Council on Compensation Insurance (NCCI) request to increase rates on a statewide average of 14.5%. This was less than the 19.6% increase the NCCI requested. The final order was approved on October 4, 2016 and becomes effective December 1, 2016.

The original rate filing requesting the 19.6% increase was filed in May 2016 and was amended in June. This amended filing was used to approve the new rates in anticipation of the future impact of the recent Florida Supreme Court decisions involving the Castellanos and Westphal cases, as well as the legislatively mandated updates to the Florida Workers’ Compensation Health Care Providers Reimbursement (HCPR) Manual. The NCCI filing that was approved is as follows:

  • A 10.1% statewide average increase for the April 28th Florida Supreme Court decision in the Castellanos case, which found the mandatory attorney fee schedule in section 440.34, Florida Statutes, unconstitutional as a violation of due process under both the Florida and United States Constitutions.
  • A 2.2% statewide average rate increase for the June 9th Florida Supreme Court decision in the Westphal case, in which the Florida Supreme Court found the 104-week statutory limitation on temporary total disability benefits in Section 440.15(2)(a), Florida Statutes, unconstitutional because it causes a statutory gap in benefits in violation of an injured worker’s constitutional right of access to the courts. The court reinstated the prior 260-week limitation that was in effect after the 1994 law change.
  • A 1.8% statewide average rate increase related to updates within the Florida Workers’ Compensation HCPR manual, per Senate Bill 1402.

The current Office of Insurance Regulation rate-hike approval makes it very clear that the Florida legislature needs to start working immediately to counteract the adverse effects of these three filings. In particular, legislators need to find solutions to attorney fees increasing dramatically because of the Castellanos decision that has overturned years of stability in the Florida workers’ compensation system by controlling attorneys’ fees and that ultimately brought Florida from the 45th worst system in the country to the top three best systems after the reforms were passed in 2003.