Florida Workers’ Comp Rates Going Up

Florida Insurance Commissioner Kevin McCarty said he will approve a 6.1 percent rate increase to become effective January 1, 2013 for workers’ compensation.

The decision was based on a filing submitted for insurers by the National Council on Compensation Insurance (NCCI) and testimony offered by NCCI at an Oct. 4 rate hearing.

The 6.1 percent figure will officially be approved by the Office of Insurance Regulation (OIR) after NCCI submits some technical changes to its filing, McCarty said.

“NCCI has provided sufficient evidence to support a rate increase based on a variety of cost factors experienced in the marketplace,” said McCarty.

McCarty said that even with this rate increase, Florida’s rates are still 56 percent below the rates prior to the 2003 reforms, and are competitive with other states nationally.

However, as he has done before, he urged lawmakers to address cost-drivers in the system.

Following the 2003 reforms, Florida experienced seven consecutive years of rate declines, although this trend has changed in recent years. The state approved a rate increase of 7.8 percent in 2010, an increase of 8.9 percent in 2011, and now a 6.1 percent increase that will take effect in 2013.

NCCI submitted evidence about the potential savings that could be realized by addressing cost drivers legislatively. NCCI said that rates could decline 1.1 percent if Florida addressed the physician drug dispensation issue, and another 5.5 percent if Florida brought its costs in line with other states for in-patient hospital, out-patient hospital and ambulatory care center (ACS) reimbursements.

McCarty and NCCI are not alone in suggesting that lawmakers take a fresh look at reforms. Insurance Consumer Advocate Robin Westcott supported the call for legislative action and supported NCCI’s rate request. “I agree that many assumptions in the filing are conservative in nature,” said Westcott. “It is difficult to find fault, especially in regards on the impact to the solvency of our carriers.”