Insurance Council Seeks Bigger Hike In Workers’ Compensation Rate

Jul 4, 2016

The workers' compensation insurance industry is seeking a nearly 20 percent rate hike, following a pair of recent Florida Supreme Court rulings and a change in state law.

The National Council on Compensation Insurance, which submits rate proposals for Florida's workers' compensation insurance industry, on Thursday filed an amended rate proposal that would boost the average rate by 19.6 percent, up from an increase of more than 17 percent proposed in May.

If approved by the Office of Insurance Regulation, the change would go into effect Oct. 1. State regulators will hold a public hearing on the rate request on Aug. 16.

The Florida Chamber of Commerce quickly pounced on the amended filing, saying the rate increases could potentially jeopardize the state's job growth.

“Small businesses create two of every three jobs in Florida, and a workers' comp rate increase as significant as this could force these businesses to choose between paying higher workers' comp rates and hiring new employees,” Chamber President and CEO Mark Wilson said in a press release.

NCCI blamed the bulk of the proposed rate hike on an April 28 Supreme Court decision that struck down a state law limiting fees for attorneys who represent injured workers. In a 5-2 ruling, the court said that a 2009 law limiting attorney's fees was a violation of due-process rights under the Florida and U.S. Constitutions because it prevented challenges to the "reasonableness" of attorney's fees awarded in workers' compensation cases.

The ruling stemmed from a case in which an attorney was awarded the equivalent of $1.53 an hour after successfully pursuing a claim for benefits for an injured Miami worker.

NCCI also pointed to a June 9 ruling in which the court decided the state's 104-week statutory limitation on temporary total disability benefits was unconstitutional because it causes a gap in benefits that violates an injured worker's right of access to the courts.

NCCI also contends that a portion of the proposed rate hike is due to a new state law, which the organization said will require rates to go up by 1.8 percent.