Florida’s workers’ compensation rates declined in 2018 and 2019, but the potential fallout from two 2016 state Supreme Court rulings are currying fears that rates are poised to spike in the coming years.
Reinstating workers’ compensation fee caps has been a priority for the Florida Chamber of Commerce, Associated Industries of Florida and the National Federation of Independent Business, among others, for the last three years.
Two bills circulating through committees seek to reform the state’s workers’ comp system. The Senate proposal caps attorneys fees, the House version does not.
The House version, House Bill 1399, advanced this week while its Senate counterpart, Senate Bill 1636, stalled.
The 15-member House Insurance & Banking Subcommittee unanimously approved HB 1399. It next goes before the House Government Operations & Technology Appropriations Subcommittee and Commerce Committee.
HB 1399, sponsored by Rep. Cord Byrd, R-Neptune Beach, could reduce workers’ compensation insurance rates by 5 percent by allowing employers to deviate from state-set rates and tie payments to rates established for Medicare.
Byrd, an attorney, agreed with the 2016 Supreme Court decision in Castellanos v. Next Door Co. that fee caps are unconstitutional. The Legislature should never have interfered with the free market by instituting them in 2003, he said.
“I think, sometimes, government has been more of a player instead of a referee,” he said. “As a practitioner, someone who has done both sides, philosophically I am opposed to caps. I think we need to trust our judges.”
HB 1399 allows for a judge to dismiss a petition if a claimant or claimant’s attorney fails to make “a good faith effort” to resolve a dispute before seeking litigation.
The proposed bill requires insurers to provide the total amount of attorney hours and fees paid for petitions, and ties outpatient surgery, care and hospitalization reimbursement to a percentage of Medicare rates which, Byrd maintains, is how employers could reduce workers’ compensation insurance rates by 5 percent.
In addition, HB 1399 clarifies caps on temporary total disability benefits for the first time since another 2016 Florida Supreme Court decision, Westphal v. City of St. Petersburg, found the state’s 104-week cap on temporary total disability benefits was unconstitutional.
HB 1399 would place a 260-week cap on total temporary benefits, but allow an additional 26 weeks if an injured worker has not reached “maximum medical improvement” by the end of those five years.
SB 1636 is similar to HB 1399 but does not provide a 26-week extension and would cap attorney fees at $150 an hour and limit overall payment to $1,500 – two elements far more amenable to state business constituencies.
Sponsor Sen. Keith Perry, R-Gainesville, pulled SB 1636 from its scheduled hearing Monday before the Senate Banking & Insurance Committee.
“I thought after talking to my colleagues and some other people, and with so much information in the changes, that it would be better for us to wait," Perry, a roofing contractor, told committee members.
SB 1636 is rescheduled to go before the Senate Banking & Insurance Committee on Monday.
Following a 14.5 percent increase in 2016, Florida’s workers’ comp rates have gone down by 13.8 percent following three declines – by 9.5 percent, plus an additional 1.8 percent as a result of the Federal Tax Cuts and Jobs Act, in 2018, and by 13.4 percent beginning January 2019.