TALLAHASSEE, Fla. – With Florida businesses facing a 14.5 percent increase in workers' compensation insurance rates, state Chief Financial Officer Jeff Atwater and a key Republican senator said they expect lawmakers to take action during the 2017 legislative session.
Atwater, who has been heavily involved in insurance issues, warned Thursday that rates will continue to climb and eventually "will impact the recovery" if the Legislature doesn't address the issue during the session.
"It's just the opening act if not addressed," Atwater said.
The state Office of Insurance Regulation on Tuesday said rates should go up 14.5 percent, mostly because of a Florida Supreme Court ruling in April that struck down limits on attorneys' fees in workers' compensation cases. The National Council on Compensation Insurance, which makes rate filings for workers' compensation insurers, had requested a 19.6 percent hike.
The 14.5 percent increase, slated to start taking effect Dec. 1, remains contingent on the National Council on Compensation Insurance making a revised rate filing.
Senate Majority Leader Bill Galvano, R-Bradenton, said Wednesday he anticipates "comprehensive" legislation about the workers' compensation issue. Galvano was asked during a break-out session at the Florida Chamber Foundation's "Future of Florida Forum" about whether the potential changes would be surgical or comprehensive.
"You can't just go back in and undo what the court did, the court found something specifically unconstitutional," Galvano said after the session.
While the 14.5 percent increase didn't reach the requested 19.6 percent, Galvano said "it's not something we can accept."
No specific proposal has been drafted, Galvano said. But he noted that the Florida Chamber of Commerce and other business groups are working on proposals that he expects will be brought forward after the elections.
The workers' compensation system could become one of the biggest issues of the 2017 session. The issue draws lobbying from a wide range of special interests, including business groups, the insurance industry, plaintiffs' attorneys, parts of the health-care industry and organized labor.
While much of the recent attention has focused on the Supreme Court's ruling on attorneys' fees, past legislative debates about the system have also dealt with issues such as benefits available to injured workers and payments to health-care providers. An issue contributing to the anticipated rate increase, for example, is a second Supreme Court ruling that found unconstitutional a limit on benefits in a case involving an injured firefighter.
After the Office of Insurance Regulation issued its rate decision Tuesday, business groups quickly took aim at attorneys who represent injured workers.
"Putting job creators and injured workers first is the right thing to do to keep Florida's workers' compensation system working," Florida Chamber President and CEO Mark Wilson said in a prepared statement. "Unfortunately, the Florida Supreme Court's ruling is not about safety or protecting workers. The effect of the … decision is to raise costs for no other reason than so plaintiff trial lawyers can raise fees."
But Mark Touby, president of the group Florida Workers' Advocates, issued a statement arguing that insurers are responsible for the rate increase.
"(State Insurance Commissioner David) Altmaier has missed an exceptional opportunity to protect the interests of Florida's business community and the hard-working men and women who drive our economy forward," said Touby, an attorney who represents injured workers. "He could have rejected the insurance industry's secretive ploy for corporate welfare to line its own pockets, all while falsely blaming a workers' compensation rate hike on two court rulings that don't actually make any rate change necessary."