Florida Okays Cost Cut Comp Reforms
NU Online News Service, May 28, 3:53 p.m. EDT?The Florida Legislature has given final approval to a workers' compensation insurance reform measure that is expected to control soaring system costs and reduce rates by 12 percent .
A spokesperson in the office of Republican Gov. Jeb Bush said that he has not yet received the reform bill (S.B. 50) and would review it when it is received. Both the Washington, D.C.-based American Insurance Association and the Alliance of American Insurers in Downers Grove, Ill., said he is expected to sign it.
According to the AIA, under Florida's present workers' comp system $1.27 is being paid out for every $1 collected in premiums.
William Stander, the Alliance Southeast region government affairs representative, said that the governor backs the reforms and is "definitely going to sign."
One major provision of the reform bill changes the criteria for a finding of permanent total disability. It eliminates the use of the Social Security disability test in favor of a more restrictive test that requires proof that employees seeking permanent total disability benefits have suffered an injury that makes them unable to perform any work.
"Injured employees won't be able to collect PTD benefits if they can perform any sedentary work within a 50-mile radius of their residence," the Alliance's Mr. Stander explained.
The reforms also ban workers' comp attorney fees that are based on number of hours worked, which insurer trade groups contend act as an incentive to prolong disputes. An exception is made for medical-only cases, in which the attorney can charge $150 an hour for up to 10 hours, or $1,500.
In addition, provisions in the workers' comp statute that exempted certain construction industry employers from participation in the workers' comp system have been repealed.
According to Mr. Stander, these exemptions had caused too many construction executives to exempt themselves from the workers' comp system, resulting in loss of revenue to the system. "The bill states that no more than three corporate officers can be exempt," said Mr. Stander.
He said also that the "bill will result in substantial cost savings because it contains substantially all of the reform elements recommended by the Coalition of Business and Insurance Industry, of which the Alliance is a major participant."
The Alliance said the bill is expected to reduce workers' compensation rates by at least 12 percent, very close to the 14 percent decrease requested by Gov. Bush.
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