Court Decision Forces Workers Compensation Cost Increase

Florida businesses are complaining about a proposed increase in the cost of workers compensation insurance.

The National Council on Compensation Insurance (NCCI) has just asked the state to consider a rate hike that would increase the cost of workers’ compensation insurance to employers by 17%.

The council submitted its filing to the Office of Insurance Regulation last week. If approved, it would take effect August 1st.

According to the NCCI’s news release the increase would cost Florida business owners $623 million annually and make Florida the most expensive state in the southeast part of the country.

NCCI blames the proposed increase on a Florida Supreme Court decision, Castellanos v. Next Door Company, which struck down Florida’s workers compensation law’s legal fee schedule as unconstitutional.

The schedule capped how much lawyers could make to the following; 20 percent of the first $5,000; 15 percent of the next $5,000 and 10 percent of the remaining amount of benefits they helped secure.

Business groups reacted.

The Florida Chamber of Commerce published this statement; "With job creators facing a 17.1 percent workers’ compensation rate increase, the Florida Chamber of Commerce today encourages the Florida Legislature to put small businesses and injured workers before personal injury trial lawyers through whatever means necessary."

“We’ve led efforts for more than 10 years to help lower workers compensation rates by almost 60 percent, and now that personal injury trial lawyers and an activist court are forcing rates to likely skyrocket, we’re not about to back down,” said Mark Wilson, the Chamber’s president and CEO.

“The Florida Chamber will lead the charge to ensure small businesses aren’t crushed under the weight of increased workers’ comp rates, and that workers’ have access to quality health care so they can return quickly back to work,” he added.

The Associated Industries of Florida (AIF) released the following statement attributed to its General Counsel Tammy Perdue; “Today’s ruling on the Castellanos vs. Next Door Company case by the Florida Supreme Court declaring the mandatory fee schedule under the workers’ compensation law unconstitutional is a significant blow to Florida employers. It will certainly trigger a substantial and hefty rate increase for which employers have not prepared or budgeted. We also know from history that this will spark an avalanche of increased and unbridled litigation that will continue to be a leading cost driver to the system in the future and a major disruption to the economic success we have worked so many years to achieve.

We call on our elected leaders to immediately act and respond to this ruling in a way that protects our economy and continues to ensure Florida businesses, as well as their employees, have a workers’ compensation system they can rely on to provide expedient care and adequate resources.”