Workers’ Comp Rate Increase: Unfair to Insurers, Employers, and Injured Workers

Tallahassee, Florida – — Florida Justice Association in Tallahassee, Florida

Late last year, Florida Insurance Commissioner Kevin McCarty approved an 18.6% workers’ compensation premium rate reduction for 2009. This week, the commissioner approved a 6.4% upward adjustment in the rate effective April 1. While the approved rate adjustment is less than that requested by the insurance industry and the overall effect is still a dramatic reduction in workers’ compensation rates for 2009, the FJA is disappointed in the Commissioner’s decision.

The state legislature amended the workers’ compensation act in 2003, dramatically reducing benefits to Floridians injured while working. The National Council on Compensation Insurance testified then that the reduction in benefits would achieve a 15% rate reduction for employers. Since 2003, workers’ compensation rates have actually dropped six consecutive times. Prior to approval this week of a rate adjustment, Florida employers were realizing an average 60% reduction in premium rates, a savings of some $610 million.

The National Council on Compensation Insurance actually filed a request for a “law-only” rate increase of 8.9%. This rate increase request is a first effort by the insurance industry to reverse the Florida Supreme Court’s recent ruling in Murray v. Mariner Health/ACE USA, a ruling that restored some small degree of fairness to the workers’ compensation system. The Supreme Court’s ruling amounts to nothing more than a recognition by the court that the rights of injured workers and Florida taxpayers should and, by necessity, must be considered if our state workers’ compensation is to operate as intended.

Florida’s workers’ compensation system should be fair to insurers, employers, and to injured workers. The insurance industry should not be permitted to reap inordinately high profits at the expense of employers, injured workers, or Florida taxpayers. A recent study by the Florida Insurance Consumer Advocate concluded that NCCI has been filing for the approval of rates that have overcharged Florida employers by an average of 24.6% during the past nine years. A mere 48.5 cents of every premium dollar is paid from these rates for medical and lost wages to injured workers and employers collect, on average, a meager 3.8 cents in dividends, both among the lowest in the nation. The recently approved rate adjustment will only continue to undermine the gross disparities already present in the current workers’ compensation system and maintain the unfairness to insurers, employers, and injured workers.

By Jacqui Sisto
Communications & Marketing Director for the Florida Justice Association in Tallahassee, Florida.

Ms. Sisto can be reach at [email protected]

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