Prepare for Increase in Workers’ Comp Premiums

  • -

Florida Supreme Court Overturns Legislative Reforms

By Tom Murphy

Florida employers have enjoyed a series of decreases in workers’ compensation rates since the 2003 legislative overhaul that has led to a reduction of over 50% in rates over the past 13 years. It appears the good times are about to come to an end for all Florida businesses now that the Florida Supreme Court has found the reforms to be unconstitutional. This is similar to their ruling in 2015 regarding the caps on non-economic damages in certain medical malpractice cases that were overwhelmingly approved as a constitutional amendment by Florida voters.

What does this mean for Florida businesses? The National Council on Compensation Insurance (NCCI) recently submitted a request to the Office of Insurance Regulation for a 19.6% rate increase across the board. The NCCI attributes this increase directly to the recent Supreme Court decisions (Castellanos & Westphal) that remove the limits on attorney fees and increase injured-worker benefits respectively.

The Florida Chamber of Commerce and Associated Industries of Florida have indicated they will work together to get the legislature to make changes in order to prevent major rate increases and keep small businesses from being crushed under the weight of increased workers’ comp rates, per Florida Chamber CEO Mark Wilson.

Anyone who has been around the workers’ compensation system or any insurance knows the popular statement “rates are cyclical”. We typically see this when either the legal profession or the insurance industry pushes for reforms after a period of time in which they believe the system has not worked in their favor. With workers’ compensation, the plaintiff bar claims to be looking out for the injured workers and the insurance companies point to the negative impact on employers. The recent Supreme Court decisions appears to have used two unique and exceptional cases to overturn years of reasonable reforms that have overwhelmingly helped Florida businesses control costs and hire new employees.

The evidence has not shown that the reforms of the past 13 years have harmed injured workers, other than some cases that are the exception and not the rule. These reforms have directly impacted attorney fees and the recent Supreme Court decisions will force the legislature to get back to work to see if they can come up with a solution to prevent the Florida workers’ compensation system from going back to being one of the worst systems in the country, as it was prior to 2003.

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