Rulings to Send Florida Workers' Compensation Rates Up
Two court decisions spell increases in costs
Florida employers are bracing for increases as high as 20% in their workers’ compensation premium rates as a result of two recent decisions handed down by the Florida Supreme Court. Construction employers are hoping to make their voices heard at a public hearing later this month. The rate increase is due to take effect Oct. 1.
In April, the state’s Supreme Court issued an opinion in the case of Castellanos v. Next Door Co., et al., finding unconstitutional a 2003 statute imposing a cap on claimant attorney fees and ordering a return to hourly fees. In June, in the case of Bradley Westphal v. City of St. Petersburg, et al., the Court ruled unconstitutional the 104-week limitation on temporary total disability benefits, set in 1994.
The combined impact of those decisions, plus an update to the Florida Workers’ Compensation Health Care Provider Reimbursement Manual, requires a total average rate increase of 19.6% , says the National Council on Compensation Insurance, which filed a requested rate increase on behalf of insurers.
“These Supreme Court decisions are just devastating,” says Rick Watson, general counsel for the Associated Builders and Contractors of Florida. “We had the highest compensation rates [before the 2003 legislation] and the lowest payoffs to the employees. The whole purpose is to get the workers back to work if they’re injured.” NCCI’s proposal is just an average, he adds, and, “in construction, our rates are always higher.” The rate increase will affect members of the American Subcontractors Association “very significantly, from the standpoint that all of our contractors’ WIP [work-in-progress] has already been bid out and contracted,” says Kenneth Brown, CEO of ASA-Southwest Florida. “They’re under contract to perform those jobs at a set price.”
Rates in Florida have been adjusted downward in recent years, after three consecutive years of increase, from 2011 to 2013. A public rate hearing on NCCI’s proposal is scheduled for Aug. 16 in Tallahassee.