New Year Sees Workers’ Compensation Rates Drop in FL – Again

Liz Carey

Tallahassee, FL ( – With the new year comes yet another decrease in Florida businesses’ workers’ compensation rates — despite two 2106 rulings from the state’s Supreme Court justices that found parts of the state’s workers’ compensation reforms unconstitutional.

In November, the Workers’ Compensation Commission approved a 13.8 percent decrease in workers’ compensation insurance rates, only a bit bigger of a cut than the 13.4 percent decrease suggested by the National Council on Compensation Insurance, or NCCI, earlier in the year.

NCCI’s recommended rate reduction was based on a nationwide trend that is seeing a decline in the frequency of claims.

The newest rate reduction follows another rate reduction of 9.5 percent that took place in 2018.

In April 2016 the state Supreme Court ruled in Castellanos v. Next Door Company, that mandatory workers’ compensation attorney fee schedules were unconstitutional as a violation of due process. Additionally, the court found in Westphal v. City of St. Petersburg, in June 2016 that the state’s 104-week limit on temporary total disability benefits was also unconstitutional for denying claimants due access to the courts.

Dean Dimke, spokesman for NCCI told that NCCI affirmed its stance on the reduction in its filing. In that filing, NCCI said that the court decisions were taken into consideration, but that the effects of the court’s decisions would not be felt for some time.

“Those cases, Castellanos v. Next Door Company, et al. and Westphal v. City of St. Petersburg, et al. brought about retroactive changes to claimant attorney fee and benefit levels. However, the favorable loss experience in Policy Years 2015 and 2016 has more than offset the combined cost increases that have emerged from those Court decisions,” the organization said in its August 2018 letter to the Office of Insurance Regulation Commissioner David Altmaier. “For this filing, about 50 percent of the data analyzed relates to policies that became effective after the Castellanos and Westphal decisions. NCCI believes the Castellanos and Westphal decisions are now exerting upward pressure on system costs, and they will continue to influence Florida workers compensation insurance rates. Policy Year 2017 will be the first full policy year post Castellanos; however, the full effects of that decision will not materialize for several years to come.”

According to the Workers Compensation Research Institute (WCRI), all of the key components of workers’ compensation claims in Florida saw increases between 2011 and 2016.

“Medical payments per claim, indemnity benefit per claim, and benefit delivery expenses per claim in Florida all grew moderately at 3 to 5 percent per year during this period,” said Ramona Tanabe, WCRI’s executive vice president and counsel in a statement earlier this year.

The WCRI study CompScope Benchmarks for Florida, 18th Edition, compared Florida’s workers’ compensation system with those in 17 other states, WCRI said. The study found that Florida’s costs per claim were in the middle when compared to other states in the study.

But those findings may change following the two 2016 Florida Supreme Court’s rulings.

“The findings from this study primarily reflect the performance of the workers’ compensation system before two Florida Supreme Court rulings, which system stakeholders believe could have an impact on the costs and litigation expenses in the state’s workers’ compensation system,” Tanabe said.

Meanwhile, Bill Herrle, executive director of the National Federation of Independent Business in Florida, told the Orlando Sentinel that 2019’s decreased rates were not a surprise, and said the reason was thanks to a good economy.

“It’s insurance principle No. 1,” Herrle said. “Premiums are flooding into the workers’ compensation system, and the risk is being spread around.”

Herrle also was quoted as saying he felt the Supreme Court’s decision to remove attorney fee caps was “problematic.” “We still think uncapped attorneys’ fees in the workers’ comp system is a bad idea.”

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