Today the National Council of Compensation Insurance (“NCCI”) announced they would amend their current Florida rate increase to be effective August 1, 2016 in order to add a 3rd component based on the “Bradley Westphal vs City of St. Petersburg” case discussed below. In short, exposure to employers and their insurers for indemnity benefits to claimants who have not yet reached “Maximum Medical Improvement” has increased from two to five years. NCCI will crunch numbers to see what the enhancement of indemnity benefits in Florida means to the go-forward rate-making process.
The first rate filing into the Florida Office of Insurance Regulation and from the National Council of Compensation Insurance targeted an August 1, 2016 rate increase of 17.1% to all in-force Florida workers’ compensation policies:
- 1st: “Castellanos vs. The Next Door Company” – whereby the Florida Supreme Court found that the mandatory attorney fee schedule for workers’ compensation plaintiff attorneys was judged to be unconstitutional as a violation of due process under both the Florida and United States Constitutions. In essence, workers’ compensation just became far more attractive to the plaintiff’s bar and thus an increase in rates of 15% has been requested.
- 2nd: Updates within the Florida Workers’ Compensation Healthcare Provider Reimbursement Manual (“HCPR Manual” – Floor Senate Bill 1402) – Increases to what doctors are allowed to bill a workers’ compensation file was updated as of July 1, 2016, causing another 1.8% increase in rate.
Today, the NCCI stood by the 17.1% increase already proposed, but also announced it would be amending the current rate filing into the State of Florida based on the additional financial exposure stemming from the case below:
- 3rd: “Westphal vs City of St. Petersburg” – The 104 week total temporary disability benefits law is unconstitutional. This decision revives the 260 week total temporary disability benefit. See the Westphal summary below. It immediately impacts open claims. The NCCI will add this additional cost to the system when submitting an amended rate increase request to be effective August 1, 2016 to all in-force policies
We will continue to report news from the NCCI, the Florida Office of Insurance Regulation and the Florida legislature where I would expect this will head if the rate proposal goes further North. The below from the NCCI today –
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NCCI EVALUATING “WESTPHAL” DECISION AND WILL AMEND PENDING RATE FILING
June 9, 2016
Tallahassee, Florida – Today, the Florida Supreme Court issued its opinion in the case of Bradley Westphal vs. City of St. Petersburg, etc, et al, No. SC13-1930 (“Westphal”). The Supreme Court, in a 5-to-2 decision, concluded that the 104 week limitation on temporary total disability benefits established in section 440.15(2)(a) of the Florida Statutes is unconstitutional as it results in a statutory gap in benefits, in violation of the constitutional right of access to courts.
The Supreme Court’s decision revives the 260 week limitation on temporary total disability benefits that proceeded the 1994 amendments to section 440.15(2)(a) of the Florida Statutes, limiting temporary total disability benefits to 104 weeks.
NCCI is currently evaluating the Westphal decision and will amend the pending rate filing currently under review by the Florida Office of Insurance Regulation. Further details will be made available upon submission of the amended rate filing.
Telephone: 850-322-4047 Fax: 561-893-5106
CONTACT: CHRIS BAILEY
Chris Bailey
State Relations Executive
National Council on
Compensation Insurance
106 E College Avenue, Suite 900
Tallahassee, FL 32301
(C) 850-322-4047
(F) 561-893-5106
