The Case Heard ‘Round the State
As you may remember, back in April, the Florida Supreme Court ruled the case of Castellanos vs. Next Door Company as unconstitutional. This ruling eliminated the statutory caps on claimant attorney fees and allowed a return to hourly fees. Claimant attorneys are now able to earn greater compensation on workers’ compensation claims.
Proposed Rate Increases
As we suspected, NCCI has proposed a rate increase of 15% for the first year. This is what NCCI has estimated the first year’s impact will be from these increased fees and systems costs in Florida.
On May 27, 2016, NCCI submitted its filing to the Office of Insurance Regulation (OIR). It includes components for two law changes:
- First year impact for Castellanos of 15%
- Impact of 8% in response to SB 1402 which ratified updates to the Florida Workers’ Compensation Health Care Provider Reimbursement Manual
The combined impact of these two law changes would be 17.1% or $623 million dollars. NCCI proposes that the increased rates be applied to new and renewal policies, effective on or after August 1, 2016. They also propose that the increased rates apply to all policies, on a pro-rata basis, effective August 1, 2016.
If the OIR approves the rate increase of 17.1%, Florida would have the highest workers’ compensation rate in the southeast.
Keep in Mind
The Castellanos decision impacts not only future cases, but past and current cases as well. The proposed rate increase does not take into account the increase in overall system costs. The retroactive nature of this case ruling may cause the costs of current cases to increase, and closed cases to reopen. NCCI is still in the process of estimating this liability and will provide more information at a later date.
At this point, this is only a proposed rate increase. Once the State responds to NCCI’s proposed increase, W3 will keep you up to date on the impact to your workers’ compensation premium.
Now more than ever, you need an agency partner who is an advocate and stays on top of your workers’ compensation claims!