Florida businesses brace for workers' comp rate hike

September 28, 2016

TALLAHASSEE, Fla. (WCTV) -- State regulators have approved a 14.5 percent increase in the cost of business insurance to protect injured workers. The increase is across the board and effective for all new and renewing policies after December 1st, but the hike will have different impacts on different industries.

High-risk industries such as construction or roofing pay as much as $1 in workers' compensation insurance for every $4 they pay in salary. Others like Mark Folmar, who owns this pawn shop, pay 80 cents for every $100 in wages that they pay.

“It’s not like we’ll turn around and set our prices slightly different. We’ll try to make more money, which is what we try to do every year,” Folmar says.

The hike is a direct result of two court cases that found portions of the law unconstitutional. In one case, attorney’s fees were limited to as little as a dollar fifty an hour. The other limited total disability benefits to just two years.

The 14.5 percent is for every business, but it could have been worse. The insurers were asking for 19.5 percent.

The National Federation of Independent Businesses and others now want lawmakers to change what the courts ordered.

“So the business community will look very closely for opportunities where we can increase benefits for injured workers, but we’re going to have to restore the attorney fee cap in order to do that,” says Bill Herrle with the NFIB.

But the lawyers say they would never be involved if insurers did the right thing from the beginning.

Personal injury and workers' comp attorney Paul Anderson says, “And even when they deny benefits and they have a claim in front of them for those benefits, they have a 30 day safe harbor under the statute, where they can furnish the benefits and still avoid paying fees.”

And because regulators cut five percent off the initial request for higher rates, the industry controlled rating group is expected to seek higher rates again next year.

Regulators gave the hike a soft landing, making it effective on December 1st or on the renewal date of the policy, instead of raising all rates in time for Christmas. An estimate of increased legal fees from the two court cases account for just over 12 percent of the rate hike. The other 2 percent is because of higher reimbursements to doctors and hospitals.