Fla. Workers' Comp Reform Effort A Struggle
By Daniel Hays
NU Online News Service, Feb. 26, 2:21 p.m. EST?Insurers' efforts to push through major changes in Florida's workers' compensation system are making progress, but could fall by the wayside as the legislature focuses on other high-profile issues, according to industry representatives.
William Stander, the Alliance of American Insurers' Florida representative in Tallahassee, said if the state's lawmakers could isolate their focus on the workers' comp reform bill, "I would say it has a very good chance." However, the picture changes, he noted, when one considers that the legislature is grappling with sales tax reform, redistricting, and cabinet reorganization of the insurance commissioner's post.
Also looming is the election for speaker of the State House of Representatives, he said.
Dick Dorsey, vice president of the Washington-based American Insurance Association's Southeast region, called the insurers' effort underway now "a very delicate balancing act."
He said a coalition of insurance interests is trying to keep intact reforms that it "believes are crucial to reining in costs, while broadening support for a significant piece of legislation during a session where legislators are having to deal with a number of hot political issues."
Last week, the Florida House Insurance Committee approved a proposal, backed by a coalition of business and insurance interests, containing most of the revisions sought by the coalition. The AIA hailed it as "a crucial first step on the road to reform."
Mr. Dorsey said the insurer coalition was successful in keeping its priority reforms intact, with the exception of provisions that would get rid of most construction exemptions.
However, Mr. Dorsey said that because "the future of the entire reform effort was very much in doubt" throughout the committee meeting, he is now encouraged.
AIA found "troublesome" amendments that were adopted at the urging of the Florida Homebuilders Association that, in effect, retain most of the construction industry's current exemptions for maintaining workers' comp coverage. Specifically, sole proprietors, partners and corporate officers engaged in the construction industry kept their exemptions, except in the case of commercial construction projects over $250,000.
Another amendment considered by the committee included a failed attempt to raise attorney fees. A priority of the coalition is to limit attorney involvement, which are larger cost drivers in Florida than other states, according to studies, AIA said.
Mr. Stander of the Alliance said the coalition "worked very hard" to make its case on attorneys' fees. He said insurers' efforts had the support of the committee chair, Rep. Leslie Waters, R-Largo, who once had a position with Allstate Insurance.
The committee backed the coalition on amendments addressing Florida's low fee schedule and limiting payment of permanent total disability benefits and PTD cost-of-living increases to older workers.
A separate Senate package containing most of the coalition's reform provisions is expected to be considered by the Senate Banking and Insurance Committee on March 4.
According to Mr. Stander, the National Council on Compensation Insurance in Boca Raton, Fla. has estimated that if the workers' comp measure now in the Senate were to pass in its current form it would mean a rate increase of between 7- and 13 percent.
Last year, Mr. Stander said, a workers' comp reform measure died in part because of small-business fears of premium increases and worries among the insurance community over whether all the provisions were favorable to the industry.
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