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The Florida Office of ÈȵãºÚÁÏ Regulation (OIR) has issued a final granting approval to the National Council on Compensation ÈȵãºÚÁÏ (NCCI) for an overall combined statewide average rate increase of 14.5 percent. This rate increase applies to both new and renewal workers’ compensation insurance policies effective in Florida as of Dec. 1, 2016.

NCCI received this approval after submitting an amended rate filing to the Office on October 4, 2016, which met the stipulations of an issued on Sept. 27, 2016.

NCCI originally requested a 19.6 percent increase on behalf of Florida insurers in June, which it said was needed after two Florida Supreme Court rulings that essentially reversed reforms passed in 2003 and rocked the state’s workers’ compensation system.

But in the Sept. 27 order, OIR disapproved NCCI’s request saying that much of an increase on new, renewal and outstanding policies was not justified.

The revised rate filing addressed the impact of Castellanos v. Next Door Company and Westphal v. City of St. Petersburg, as well as legislatively-mandated updates to the Florida Workers’ Compensation Health Care Provider Reimbursement Manual (HCPR Manual).

OIR said the individual rate impacts will include:

• A 10.1 percent statewide average rate increase for the April 28 Florida Supreme Court decision in the case of Castellanos v. Next Door Company, which found the mandatory attorney fee schedule in , Florida Statutes, unconstitutional as a violation of due process under both the Florida and United States Constitutions.
• A 2.2 percent statewide average rate increase for the June 9 Florida Supreme Court decision in the case of Westphal v. City of St. Petersburg, in which the Florida Supreme Court found the 104-week statutory limitation on temporary total disability benefits in , Florida Statutes, unconstitutional because it causes a statutory gap in benefits in violation of an injured worker’s constitutional right of access to courts. The Supreme Court reinstated the 260-week limitation in effect prior to the 1994 law change.
• A 1.8 percent statewide average rate increase related to updates within the Florida Workers’ Compensation HCPR Manual per . The manual became effective on July 1, 2016.

Though the decision was expected, it is still a blow for the state, which had seen rates reduced by 60.3 percent since 2003 because of workers’ comp reforms, according to the American ÈȵãºÚÁÏ Association. The Association, which represents approximately 350 insurers across the country, said it will work with state policymakers to find a legislative solution to the Court’s decisions.

“NCCI’s amended filing of a 14.5 percent rate hike emphasizes the urgent need for the [Florida] Legislature to reverse the harmful effects of the Castellanos and Westphal decisions,” said Ron Jackson, Southeast Region vice president for AIA. “In particular, the Castellanos decision overturned reasonable parameters on claimant attorney fees that fairly regulate costs in Florida and many other states with similar laws, in favor of what has proved to be an uncapped approach that unjustly enriches those attorneys and will inevitably plunge the workers’ compensation system into the type of crisis that necessitated the 2003 reforms.”

Related:

• Florida Approves 14.5% Workers’ Comp Rate Hike in Response to Court Rulings
• Florida Awaiting Final Workers’ Comp Rate Decision
• NCCI Proposes Nearly 20% Florida Workers Comp Rate Increase
• Florida Supreme Court Strikes Down State Cap on Temporary Disability Benefits
• Florida Judge: 104-Week Limit on Temporary Disability Benefits Unconstitutional
• Florida Court Reverses Itself: 104-Week Limit on Temporary Benefits Constitutional
• Florida Supreme Court Finds Attorney Fee Schedule Unconstitutional; Passes on Other Key Workers’ Comp Case
• Florida Braces for Rate Hikes, Litigation Due to Workers Compensation Fee Ruling
• NCCI Seeks to Raise Florida Workers Comp Rates by 17% in Light of Court Ruling

Topics Trends Florida Workers' Compensation Pricing Trends