On April 28, 2016, the Florida Supreme Court issued an opinion in the case of Castellanos vs. Next Door Company, declaring Section 440.34, Florida Statutes, unconstitutional. The anticipated impact of the decision is the elimination of the statutory caps on claimant attorney fees and a return to hourly fees.
On June 9, 2016, the Florida Supreme Court issued their opinion in the case of Bradley Westphal vs. City of St. Petersburg. This decision concluded that the 104 week maximum on temporary total disability benefits was unconstitutional, deciding to extend the limit to 260 weeks.
The Westphal verdict came on the heels of the Castellanos Workers’ Compensation case ruling, which resulted in NCCI, the governing body responsible for setting premium and expected loss rates, proposing a 17.1% rate increase on May 27, 2016, to the Office of Insurance Regulations (OIR).
On June 30, 2016, NCCI amended the above-mentioned filing to include an additional component as a result of the Westphal ruling. The pending rate increase is now +19.6%. Additionally, NCCI proposes:
• The increased rates will apply to new and renewal policies that are effective on or after October 1, 2016.
• The increased rates will apply to all policies in effect on October 1, 2016 on a pro-rata basis through the remainder of the term of these policies.
*The OIR is expected to schedule a public hearing to be held in August. NCCI will not comment further on the pending rate filing prior to the public hearing.
The rulings in Westphal and Castellanos cases are having an extreme impact on workers’ compensation rates. We predict these high-profile rulings will likely put Florida’s rates back on path with the record level rates seen in the early 2000s, particularly in the areas of premium rates, claims costs, and carrier marketplace tightening.
WE STAND READY!
LassiterWare stands ready to assist Florida businesses with minimizing the impact of this decision on their day to day operations by way of our exclusive service offerings:
• Safety & Loss Control Resources
• Human Resources Consulting
• Contractual Risk Transfer Assessments
• Claims Management & Advocacy
Our systematic approach for managing costs will not fall short in delivering exceptional workers’ compensation programs. For additional questions, please do not hesitate to reach out to any of our LassiterWare representatives.