A bill which would make changes to Florida’s workers’ compensation has been approved by a House panel even though it does not contain reforms requested by the state’s business community. Groups which represent retailers, major corporations, and small enterprises have been asking for caps on attorney fees in injured workers’ claim cases. They say these caps are necessary to stop workers’ compensation premiums from skyrocketing.
Instead, the House panel unanimously passed proposal HB 1399 last week. By changing the way insurance providers reimburse health care companies, HB 1399—if passed—could lead to a 5 percent reduction in the workers’ compensation insurance premiums paid by employers. This would follow the 13.4 percent reduction in state-set workers’ compensation insurance rates approved last year.
“Reducing the cost of doing business means additional savings could be passed onto Florida businesses, easing financial burdens,” said Jimmy Patronis, Florida’s Chief Financial Officer, at the time. Unlike last year’s reduction, which affected state-set rates, HB 1399 would allow insurers to deviate from these rates, reducing them by 5 percent.
Even with these reductions, workers’ compensation dues represent a sizeable overhead for businesses. In January 2018, workers’ compensation cost employers in Florida an average of $1.81 per $100 of payroll. For businesses involved in higher-risk industries such as construction, rates are typically much higher.
Last year, I reported on the case of Vanessa Arreguin of West Palm Beach, who concealed her construction company’s payroll in order to avoid paying tens of thousands of dollars in workers compensation premiums. If convicted of all the counts she has been charged with, Arreguin faces up to 20 years in prison. I have also reported on other similar cases from across the country where businesses have attempted to avoid paying their dues in order to keep costs down.
Tom Koval, a lobbyist for FCCI Insurance Group, warned the House Insurance and Banking Subcommittee that allowing insurers to depart from the state-set rates could lead to insolvencies on the part of insurance companies as well as predatory pricing.
Nonetheless, Florida Justice Reform Institute lobbyist Kimberly Fernandes explained her organization was comfortable supporting the bill. “This bill does good things,” she said, even though she feels it does not go as far as a related Senate bill. That bill—which recently failed to garner enough support to move beyond the committee stage—included the caps on attorney fees which the House bill did not. Attorneys would have been limited to earning $150 an hour when representing clients fighting workers’ compensation cases up to a maximum of $1,500 per case.
Business groups including the Associated Industries of Florida, the Florida Chamber of Commerce, and the National Federation of Independent Business argue that in the absence of caps, workers’ compensation insurance premiums will continue to rise. This, in turn, would negatively impact Florida’s economy.
Caps for attorney fees were first passed in 2003. In 2016, they were ruled unconstitutional by the state Supreme Court. State Rep. Cord Byrd (R-Neptune Beach) is a sponsor of the House bill. “I think sometimes government has been more of a player instead of a referee,” said Byrd who is himself an attorney. “As a practitioner, someone who has done both sides, philosophically I am opposed to caps. I think we need to trust our judges.”
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