Workers’ Comp Rate Increase Rolled Back

Workers’ Comp Rate Increase Rolled Back

TALLAHASSEE — Florida Insurance Commissioner Kevin McCarty on Wednesday issued a final order approving a workers compensation insurance rate rollback, citing a new law that will limit plaintiffs attorneys fees in the cases.

McCarty’s office said the new approved rate decrease will save Florida employers about $172 million in insurance costs. It effectively restores the 18.6 percent rate decrease that took effect Jan. 1 with a projected savings of $610 million for Florida employers.

The order, which was requested by the National Council on Compensation Insurance, which files rates for the industry, rolls back a recent 6.4 percent rate increase that had gone into effect in the wake of a Supreme Court decision last year. That decision, Murray v. Mariner, invalidated a fee schedule that had been in place since 2003 that sought to limit what attorneys for injured workers could collect in comp cases.

The business community made it its top priority this year to undo the Murray decision with new legislation that restores the cap. Businesses and insurers said that without it, the ceiling for what they may have to pay out in workers comp cases is too uncertain, and could potentially drive premiums up to high levels not seen since the early 2000s.

The bill (HB 903), sponsored by Rep. Anitere Flores, R-Miami and Sen. Garrett Richter, R-Naples, passed the Legislature and was signed into law last week by Gov. Charlie Crist.

The approved decrease applies to new and renewal business and will become effective July 1.  

“I am pleased that Gov. Crist and the Florida Legislature recognized the importance of keeping our workers’ compensation rates down,” McCarty said in a statement accompanying the order. “I believe that injured workers still will have appropriate access to the legal system while also still keeping workers’ compensation rates affordable for employers.”

Under the new law attorneys will continue to be paid based on a fee schedule of 20/15/10/5 percent of benefits secured. Hourly fees will not be allowed.

A court challenge of the new law, however, is almost a certainty. Labor groups and trial lawyers have said they believe the new statute is unconstitutional and are searching for a workers comp plaintiff to challenge it.

Businesses point to drops in workers comp premiums since a 2003 law that overhauled the workers comp insurance system, adding fraud protections and putting in place the fee cap. Before that law, the state consistently had the highest workers comp rates in the nation but since then has dropped out of the top 10.