Florida officials announced in early November that the state’s workers’ compensation insurance rates will drop by 13.8 percent in 2019. That follows a 9.5 percent drop one year ago.
Among the causes for the decrease are a long-term decrease in the frequency of claims, overall safer working conditions, increases in automation and greater employment which means greater premiums.
The National Council on Compensation Insurance (NCCI) said the decrease is in line with other states.
Two court rulings could affect rates
Insurers are watching the effects of two 2016 state Supreme Court rulings on insurance rates. Both came as a result of Florida’s attempt in 2003 to reduce the cost of workers’ comp on businesses.
One is Castellanos v. Next Door Company. In this ruling, the court said the state’s attempt to impose a mandatory sliding scale for attorney’s fees for workers’ comp cases was unconstitutional. In Castellanos’ case, the attorney would have received $1.53 per hour via the scale. The attorney had asked for $350 per hour. The justices said a lawyer is essential to “navigate the ticket” of workers’ comp laws and depriving the worker of a lawyer at a fair price deprived the worker of efficient delivery of disability and medical benefits.
The other is Westphal v. City of St. Petersburg. This ruling found that the state’s attempt to limit temporary total disability coverage from 260 weeks (five years) to 104 weeks (two years) was also unconstitutional because it created a gap in coverage that was unfair to workers – specifically, the injured firefighter in this case.
Using years-old data
The NCCI used data from 2015 and 2016 to determine a recommendation for the insurance rates. That means it is using data that did not include the effects of either Supreme Court decision.
Businesses sand insurers are waiting to see exactly what effects the two rulings will have on the workers’ compensation market. While most believe the rulings will increase rates, greater productivity and a stronger economy will keep the rates down, others believe.