The National Council on Compensation Insurance proposed the drop Tuesday to the state Office of Insurance Regulation. The main reason for the hefty dip, the council said, is that claims for the program are being filed less frequently now than they have been in previous years. Fewer claims reflect a smaller overall need.
“There are enough fewer new injured workers claiming injury than requiring those wages and medical benefits to decrease the cost,” said Robert Wilson, president and CEO of WorkersCompensation.com, an information clearinghouse.
The decrease won’t affect the amount the amount that is paid out on claims, Wilson said. Instead, it will decrease the amount that employers, who bear the cost of such claims, will have to pay.
According to the council, the recent drop in claims has more than offset any upward pressure on rates so far from two 2016 Supreme Court decisions involving workers compensation — Castellanos v. Next Door Company and Westphal v. City of St. Petersburg.
The Castellanos case did away with previously-instituted caps on attorney fees. The caps were implemented in 2003 to clamp down on an increase in litigation brought about by the previous system, which allowed attorneys to collect a percentage of the benefits awarded to their clients. In the Westphal decision, the limit for temporary total disability limits — previously 104 weeks — was found unconstitutional and was raised to 260 weeks.
“NCCI believes the Castellanos and Westphal decisions are now exerting upward pressure on system costs, and they will continue to influence Florida workers compensation insurance rates,” the council said in its proposal.
Both, Wilson said, were expected to push rates up, but thus far haven’t had a significant impact. According to the council, the full effects of the cases will not be known for a few years.