Florida Checking 75,000 Contractors' Comp Status

Florida Checking 75,000 Contractors' Comp Status

By Daniel Hays

NU Online News Service, Jan. 26, 2:35 p.m. EST? Florida has sent 78,000 letters to contractors to find out how many are exempt from workers' compensation coverage under tighter regulations that became effective this month, officials in the state said.

The new rules for contractors were part of a comprehensive package of legislative changes for the state's workers' compensation system, which was signed into law last July. Among the revisions included were tighter benefit eligibility requirements and restrictions on legal fees.

As a result of the initial changes, the Florida comp rates were rolled back 14 percent. The next part of the law, which has just taken effect, involves contractor coverage and hospital/physician fees.

Andrew Sabolic, policy coordinator for the Florida Division of Workers Compensation, said in the past a contractor's exemption had applied to anyone who listed themselves as a sole proprietor or partner. Now the only exemption is to be an officer of a corporation, a member of a corporation, or owner of a limited liability company owning 10 percent of a firm.

The change in the law was made after legislative findings that under the old system there was a substantial amount of premium evasion. Injured workers who were wrongly classified as exempt would successfully sue to obtain benefits from an injured contractor whose policy had not charged for the risk they represented.

Mr. Sabolic said the division "is in the process of identifying individuals without exemption" but it was too early to tell yet what the change to the system might be.

According to an estimate last year by the National Council on Compensation Insurance, a statistical group based in Boca Raton, Fla., the change in exemption rules should generate a four percent savings to the Florida comp system.

Lori Lovgren, state relations executive for NCCI, said her firm will be gathering data from the first six months of this year, on which to base an exemption pricing recommendation for the state in August.

She noted, however, that the new hospital/physician fee reimbursement, which will also be factored in, is expected to increase rates 2.7 percent.

Mr. Sabolic said the letters had gone out to previous exemption holders with a questionnaire attached.