Two Florida Supreme Court decisions and one new law will increase workers compensation rates by 20% in Florida beginning October 1, 2016, for new and renewed policies. The Court decisions relate to a) the current cap on lawyers' fees in workers comp cases and b) the number of weeks of coverage. The cost of a 20% increase in workers comp rates to Florida businesses is estimated at $714 million/year. In 2000, Florida had the highest workers comp rates in the nation. Due to legislation passed since then, rates have come down 60%, ranking Florida this year at the 28th highest in workers compensation rates among the states. That ranking will soon change without intervention and advocacy by Florida businesses.
Limiting attorneys' fees in workers comp cases has been the single biggest factor in holding workers comp rates down in the past 13 years. To illustrate an example of what the recent Florida Supreme Court decision means in costs, recently a plaintiff received $822.70 in a workers comp settlement and the attorneys received $37,520. The 20% increase in workers comp insurance rates expected in October equates to $1.18/$100 of payroll for pure loss costs, plus costs for administration and other expenses, up from 99 cents/$100 of payroll.
The Office of Insurance Regulation will hold a public hearing with the NCCI on August 16 at 9am in Tallahassee to take public testimony on the proposed NCCI proposed rate increase.
Nancy D. Stephens, CAE, DPL
Nancy d. Stephens & Associates, LLC
1625 Summit Lake Drive, Suite 300
Tallahassee, FL 32317