It’s no secret to lawmakers, business owners and workers throughout the state that Florida’s workers’ compensation system is in need of reform. With the recent unnecessary rate hike in premiums for workers’ comp insurance, the state’s economy will suffer along with the looming potential for job loss.
Recent coverage of the workers’ comp system has correctly focused on the lack of transparency and competition in the ratemaking process. There is every indication that the quest for comprehensive workers’ comp reform, including a new ratemaking process, will be one of the leading issues of the upcoming legislative session.
In the overwhelming majority of states, workers’ comp premiums are determined through a competitive ratemaking process, where employers are able to shop around for the best rates. Not so in Florida. Ours is one of just four states using an antiquated system that allows a trade group of industry insiders, called the National Council on Compensation Insurance (NCCI), to have a formal role in setting workers’ comp rates. NCCI files just one set of rates to be used by all insurance carriers, virtually eliminating market competition.
The ultimate beneficiaries of an effective workers’ compensation system are supposed to be both employers and the workers who are unfortunately injured on the job. Here are four ways Florida legislators can craft a fair policy that will work for both workers and the businesses that employ them:
— Develop a transparent ratemaking process that allows for meaningful competition. The current process with NCCI is a bad deal for the tens of thousands of businesses in Florida required to pay workers’ comp premiums every year — they can’t shop around for better prices with more efficient insurance carriers, and Sunshine laws are virtually ignored. This is a seriously flawed system, and Florida’s business community suffers as a result.
— Permit some element of patient choice in medical care. The current process is controlled entirely by the employer’s insurance carrier, and the injured worker cannot receive treatment from their selected doctor. This often leads to substandard treatment of the employee and prolongs recovery. Reforming the system to allow for patient choice of a specialist will not only give comfort to the injured worker by allowing them to use their preferred doctor, but also will potentially get them back to work sooner. This benefits both employee and employer.
— Develop a midlevel tier for providing benefits once the doctor determines the employee has reached Maximum Medical Improvement (MMI). Currently, an injured worker may receive temporary benefits until reaching MMI. Unless they are declared “permanently and totally disabled,” their eligibility for post-MMI benefits is wholly inadequate. This means that if the worker has a career-altering injury — but not one that is career-ending — there is no meaningful remedy in the system. This affects a significant number of injured workers, and there must be a safety net to protect them.
— Ensure that injured workers have proper access to the court by maintaining a reasonable standard for attorneys’ fees. Attorneys’ fees are only paid by the insurance carrier when benefits are wrongfully denied. This is the only “hammer” that the injured worker maintains to receive the benefits for which they are entitled.
It’s time for Florida to have a workers’ compensation system that addresses the concerns of all affected parties, centered on the injured workers and their employers — not just on the needs of the insurance companies.
Richard Chait serves as chair of Workers’ Compensation Section of Florida Justice Association (FJA).