Attention Florida business owners — in case you missed it, you are about to be hit with a workers’ compensation insurance increase that you most likely haven’t planned for, all for the benefit of Florida’s billboard trial lawyers.
This week, the Florida Office of Insurance Regulation approved a 14.5 percent workers’ compensation rate increase that takes effect December 1 for new and renewal policies, the fallout from two damaging Florida Supreme Court decisions, Castellanos and Westphal.
A rate increase this big, this sudden, hurts Florida’s competitiveness and employers large and small. Many businesses will be forced to delay hiring — or even cut existing staff — to cover this leap in their workers’ comp premiums.
The increase is also a direct blow to Florida’s business-friendly climate and jeopardizes the 62 consecutive months of private-sector job growth we’ve experienced.
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Let’s rewind back to 2003. At that time, Florida had the second-highest workers’ comp rates in the United States. These rates were threatening our state’s competitiveness. In response, the Florida Chamber of Commerce joined with then-Gov. Jeb Bush to pass a series of common-sense legislative reforms.
These reforms have become a national success story. Since enactment, Florida’s workers’ comp rates dropped approximately 60 percent, while at the same time injured workers got the care they needed more quickly and were able to return to work an average 10 days sooner than in the past.
But the Supreme Court rulings, issued earlier this year, have jolted job creators and threaten to unravel all the great progress our state has made over the past 13 years.
The most damaging of the two court rulings overturned reasonable attorney fee caps that were established to stop trial lawyers from using often minor workplace injuries as a means for suing businesses in hopes of hitting the jackpot on fee awards.
Florida’s insurance regulators had little choice but to approve the sudden rate hikes we’re seeing now because they forecast that the court’s approval of runaway legal fees is retroactive and will set off a tidal wave of trial lawyers refiling old cases and concocting new ones.
The worst part of this mess is that it isn’t about improving safety or care for injured workers. It’s been thoroughly documented that the 2003 reforms succeeded in getting workers well and back to work faster, while eliminating unnecessary legal costs. The only group benefiting from this ruling is the trial lawyers.
In fact, in Castellanos, the trial lawyer argued for $38,000 in attorney fees in a case in which the injured worker was awarded only $800 — and the Supreme Court now says those fees are acceptable.
We urgently need a legislative solution to address this looming crisis. Our goal must be to ensure that injured workers continue to receive access to quality care and the court system, while providing job creators cost controls and the benefits of reining in outrageous attorney fees.
The Florida Chamber is actively leading the charge to help lower workers’ comp rates once again. Our Workers’ Compensation Task Force has been engaging Florida’s highest elected leaders, working with the brightest legal minds and coordinating with other states to develop the right solution.
We are also working closely with business leaders and local chambers throughout the state to ensure that Florida’s success story does not unravel and become a nightmare again. Putting injured workers and job creators first, not trial lawyers, is the right thing to do to keep Florida’s workers’ comp system working.
Mark Wilson is the president and CEO of the Florida Chamber of Commerce.