Changes to Florida Workers' Compensation Costs

Florida Approves 14.5% Workers' Compensation Insurance Rate Increase

As has been expected, significant changes are coming to the costs associated with workers’ compensation coverages in the state of Florida. The Florida Office of Insurance Regulation (OIR) has approved a statewide workers' compensation insurance rate increase of 14.5% for businesses to take effect on December 1, 2016.

Why the change?

The Florida Supreme Court ruling on April 28, 2016 stated that the attorney fee schedule that was passed in 2009 was unconstitutional under both Florida and the U.S. Constitution as a violation of due process in the case of Marvin Castellanos v. Next Door Company, et. al.

Also, on June 9, 2016, The Florida Supreme Court also issued its opinion in the case of Bradley Westphal vs. City of St. Petersburg, etc, et al declaring the 104-week limitation on temporary total disability benefits unconstitutional. 

When will rate changes go into effect?

The OIR has approved a 14.5% average rate increase effective December 1, 2016.

Why is this date significant?

Most rate changes that are implemented on a state level in Florida are done at the start of each year. With the immediate ramifications of this Florida Supreme Court ruling, the adjustment is effective December 1, 2016.

How will this affect my company's workers’ compensation rates?

The rate changes that are being proposed by NCCI and the state of Florida are mandatory for all companies that handle workers’ compensation insurance and claims. These rate changes are not something that can be “opted out” of by companies doing business in the state of Florida. With the mandatory nature of the rate change, companies are legally required to comply with the rates implemented by the NCCI and Office of Insurance Regulation.
Progressive Employer Management Company's (PEMCO) clients will, in most cases, continue with the discounts they are currently receiving at the existing rates. The manual rates, to which discounts are applied, will be increasing based solely upon the final approved rates that are given by the State of Florida. Due to the NCCI mandatory rate changes, PEMCO will be adhering to the changes that are implemented to remain in compliance with state law.

What particular aspects of this rate change should my company be most vigilant about?

This change being implemented by NCCI and the state of Florida is a mandatory change and will be incorporated into workers’ compensation charges by reputable PEOs and insurance companies that do business within the state of Florida.

How can I get more information on these rate changes?

The workers’ compensation professionals at Progressive Employer Management Company are deeply immersed in how these changes from NCCI will affect not only our clients, but companies throughout the State of Florida. If your company needs assistance in understanding how to proactively plan for the changes related to this NCCI rate change and to prepare for future financial changes, please contact us today or call (888) 925-2990. Existing PEMCO clients can contact their Client Services representative for further information on these ongoing changes to workers’ compensation rates in Florida.

What is the current status of the litigation that could impact the 12/1/16 rate change?

As of December 12, 2016, the Office of Insurance Regulation and NCCI’s requests for a stay pending the outcome of their respective appeals have been granted.  The appeal shall proceed on an expedited basis with final decision expected by February 2, 2017. 

The current stay provides for continued application of the approved rate change effective 12/1/2016.

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