Gov. Bush Signs Fla. Workers' Comp Bill

By Michael Ha

NU Online News Service, July 15, 3:25 p.m. EDT?Florida Gov. Jeb Bush today signed into law a bill designed to reform the state's workers' compensation system by tightening benefit eligibility requirements and restricting legal fees.

The measure, S.B. 50, which the governor signed at noon today in St. Cloud, a suburb of Orlando, Fla., takes effect Oct. 1. According to proponents of the legislation, it should help repair Florida's workers' comp system, which has been burdened by soaring costs.

"This legislation is a great example of what can happen when the Florida Legislature works together. Florida's workers' compensation system was crumbling under the weight of rampant fraud and skyrocketing insurance costs," Gov. Bush said at today's signing.

He said also that the measure will produce 12.5 percent cost savings to his state's workers' comp system.

"Gov. Bush signed the bill at a construction site in St. Cloud, and that was very appropriate because construction companies have been really hard-hit by the problems in Florida's workers' comp system," noted Julie Pulliam, public affairs director for the American Insurance Association Southeast region. AIA is based in Washington, D.C.

"We expect construction companies, along with other industries, will benefit from this new law," Ms. Pulliam told National Underwriter.

Cecil Pearce, A.I.A. vice president for the Southeast region, also added that this bill "represents the most important changes to Florida's workers' compensation laws in 10 years, and they are long overdue."

Ms. Pearce pointed out that carriers' costs had escalated to an "unsustainable level" in Florida, and that they were paying out $1.27 for every dollar in premium. "Availability had also become an issue, as insurers questioned whether they could continue to participate in the Florida workers' comp market," she said.

A new study released this week by the Workers Compensation Research Institute also argued for the need to improve Florida's antiquated workers' comp system--the Cambridge, Mass.-based nonprofit research group found that, for 1999 claims evaluated in mid-2000, a workers' comp claim in Florida cost an average of $3,081.

This average figure for the Sunshine State was some 18 percent higher than the median for the 11 other large states also examined in the group's study.

According to Downers Grove, Ill.-based Alliance of American Insurers, the new law would play a significant role in limiting the cost of insuring Florida workers against injury and even boosting the state's economic strength.

"By signing this bill into law, the governor has begun the process of easing the heavy burden that Florida businesses pay each day by cutting the waste and fraud inherent in the state's current workers' compensation system," said William Stander, Southeast regional government affairs representative for the Alliance.

Mr. Stander noted that Florida businesses currently pay the second-highest rates for workers' comp insurance in the country, while injured Florida workers get the second-lowest benefit levels.

Dave Anderson, Alliance vice president of workers' compensation and health, also predicted that the reduced workers' comp costs would help bring down the overhead for Florida businesses, "giving the state's economy a needed lift and indirectly creating more jobs for Florida citizens, particularly in the small-business arena."

The reform bill, among other things, increases fraud penalties and alters the criteria for determining "permanent total disability." The new bill, for instance, would eliminate the use of the Social Security disability test--instead, it would require clear evidence from workers to ensure that they have truly suffered a "catastrophic injury" that makes them incapable of performing any work.

Another provision in the bill would limit hourly fees for defense attorneys to medical-only cases. Such hourly payment arrangements, some critics have argued, have tended to create an incentive for lawyers in stretching out legal disputes.

Also included in the bill is a provision that repeals a loophole used by some in the construction industry to avoid participation in the workers' comp system.

Special Reports /

Gov. Bush Signs Fla. Workers' Comp Bill

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