It’s Official: Florida Workers’ Comp Rates Going Up Nearly 15%

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

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

NCCI originally requested a 19.6 percent increase on behalf of Florida insurers in June, 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 recent Florida Supreme Court decisions, as well as legislatively-mandated updates to the Florida Workers’ Compensation Health Care Provider Reimbursement Manual (HCPR Manual).

The individual rate impacts include:

• A 10.1 percent statewide average rate increase for the April 28 decision in the case of Castellanos v. Next Door Co., which found the mandatory attorney fee schedule 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 decision in the case of Westphal v. City of St. Petersburg, in which the Court found the 104-week statutory limitation on temporary total disability benefits unconstitutional because it causes a statutory gap in benefits. The court reinstated the 260-week limitation.
• A 1.8 percent statewide average rate increase from updates to the Florida Workers’ Compensation HCPR Manual.

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 Insurance Association. The Association, which represents approximately 350 insurers across the country, said it will work with state policymakers to address 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.