State legislatures, regulatory agencies and rate makers have been busy lately enacting, tweaking, and doing away with various workers' compensation laws, rules and rates. A sampling of what has been happening across the country recently:
Florida: The National Council on Compensation Insurance (NCCI) filed for a 4.2% rate decrease of Florida's workers' compensation rates on May 7. After approval by the Florida Office of Insurance Regulation, this decrease — the eighth since 2003 — brings the cumulative overall statewide average decrease in Florida's workers' compensation rates to 64.7 percent since massive reforms were enacted in 2003. The filing called for an effective date of July 1 on new and renewal policies.
In making the filing, NCCI cited the reduction in assessments on carriers and self-insurers from Florida's Special Disability Trust Fund (SDTF) from 4.52% to 1.46%. The Legislature established the SDTF in 1955 to encourage the employment of workers with pre-existing conditions; the SDTF was modified in 1997 to eliminate the eligibility for accidents that occurred after Jan. 1, 1998. This is the first decrease in the SDTF assessment since 1994.
Also in Florida, Insurance Commissioner Kevin McCarty ordered 16 workers' compensation insurance companies or groups to return a total of over $9.4 million in excessive profits to their policyholders. Workers' compensation insurers are required to return excess profits pursuant to Section 627.215, Florida Statutes. Upon an evaluation by McCarty's office of submitted data that included earned premium and incurred losses, the office determined that 16 workers' compensation insurance companies or groups realized excess profit as defined by statute for the 2005, 2006 and 2007 calendar/accident years.
California: Based on data from the U.S. Department of Labor showing California's State Average Weekly Wage (SAWW) decreased from $984.83 to $979.90 in the 12 months ending March 31, 2010, California will not enact any changes in minimum and maximum temporary total disability and permanent total disability rates for 2011 work injuries. Under California law, those rates and several other workers' compensation benefits are tied to increases in the SAWW.
Virginia: Gov. Bob McDonnell has signed legislation affecting short-term disability benefits for Virginia state police officers injured in the line of duty. The new law extends supplemental short-term disability coverage equal to 100% of their compensation short-term disability benefits from 125 days of work to six months. The coverage can be extended to one year if a medical evaluation indicates the officer is likely to return to service within the additional six months.
Arizona: The House is considering legislation that will require the State Compensation Fund of Arizona to become a mutual insurance company owned by its policyholders. The bill stipulates the successor mutual insurer corporation would not be an agency or public entity of the state.
Rhode Island: Legislators are considering bills to halt the misclassification of employees by employers. The bills clarify the definition of "employee" in the workers' compensation and unemployment benefits context, require registration with the state Department of Labor and Training of all independent contractors and the entities that hire them, and provide tools to detect misclassification. Recent studies show that over 6% of Rhode Island employees may be misclassified, draining the state of some $50 million in related revenue.
Tennessee: Lawmakers have reached agreement on legislation that will exempt some sole proprietors, partners, and corporate officers from a 2008 law that requires all employees of construction companies to carry workers' compensation insurance. However, the cost to opt out of the coverage is $200 for two years. People qualifying for the exemption include sole proprietors, partners in a limited liability company who own at last 30 percent of the company, and up to three corporate officers.
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