Florida House and Senate Release Early Details of Workers’ Compensation Proposals
Mar 3, 2017
The Florida House and Senate have both released early details of their workers’ compensation plans ahead of next week’s March 7 start of the 2017 Florida Legislative Session.
The House Insurance and Banking Subcommittee will workshop its draft proposal on March 7.
At this time, a Senate subcommittee hearing has not been scheduled for the Senate proposal, which took shape as SB 1582 relating to Workers’ Compensation Insurance filed by Senator Rob Bradley (R-Fleming Island) today, March 3.
Senator Bradley’s SB 1582 addresses a number of recent legal challenges and outlines reforms needed to bring stability to the workers’ compensation rates paid by Florida businesses.
“While I believe comprehensive legislation to overhaul the entire workers’ compensation system and reduce rates is our ultimate goal, the current cycle of enacting laws that impact businesses only to have those changes overturned by the courts creates instability for businesses that must be avoided,” Senator Bradley said. “My goal in filing this bill is to concentrate efforts on stabilizing rates and introducing more competition between insurers. The bill also incorporates recent court decisions to avoid costly and protracted litigation.”
The legislation filed today requires insurance carriers to authorize or decline requests for authorization from health care providers within three business days. The request would be deemed as authorized if the insurance carrier fails to respond. The bill also requires a claimant to state with specificity the amount of each requested benefit at issue in a petition, and requires judges of compensation claims to dismiss petitions that do not contain such specificity.
The bill amends statutes relating to temporary total disability benefits and temporary partial disability benefits from 104 weeks to 260 weeks, consistent with the Florida Supreme Court decision in Westphal v. City of St. Petersburg. In keeping with the Florida Supreme Court decision in Miles v. City of Clearwater, the bill deletes the prohibition against attorneys and others to receive a fee or other consideration unless approved by a Judge of Compensation Claims (“JCC”).
“Making meaningful comprehensive changes that can withstand judicial scrutiny should be the goal,” Senator Bradley explained. “This legislation incorporates significant provisions that will stabilize rates and bring Florida in line with 38 other states that encourage more competition among insurers and limit the amount of the insurer’s defense fees that can be passed on to businesses, while not subjecting businesses to a tug-of-war between the Legislature and the Judiciary.”
The legislation converts Florida to a loss cost state, similar to 38 other states that allow a rating or advisory organization to file the rates that are projected to cover losses. Under this system, insurers are required to file separately the remaining components of the rates needed to cover expenses and profit, known as loss costs multipliers, encouraging competition among insurers for the remaining components.
Attorney fees continue to be a major driver for rate increases and an effort to rein in those fees by the Legislature was overturned by the Florida Supreme Court in a 5-2 ruling last year. Therefore, the legislation retains the statutory fee schedule for setting claimant attorneys’ fees, but directs the JCC to consider factors in each case, as well as allows the JCC to decrease or increase the attorneys’ fee subject to a maximum hourly rate of $250. The legislation also provides that an insurer’s defense and cost containment expenses (“DCCE”) are excessive if they exceed 15 percent of the insurer’s incurred losses for the average of the three most recent calendar years. Each insurer must return amounts over 15 percent DCCE to employers via either a cash refund or credit toward the future purchase of insurance.
Click here for complete information on SB 1582.
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