Group recommends 15% rate drop for Florida workers’ comp policies

Florida businesses will continue to see decreases in their workers’ compensation rates in 2024.

The National Council of Compensation Insurance (NCCI) is proposing insurance carriers reduce their workers’ compensation costs on average by 15% for Florida businesses starting Jan. 1, 2024.

Statewide business associations cheered the news.

“This is good news for the otherwise inflationary pressures small business owners are feeling,” NFIB Florida Executive Director Bill Herrle said, adding that recent NFIB polling showed that 21% of business owners reported that inflation was their single most important problem in operating their business.

The proposed filing is based on data from Policy Years 2020 and 2021 as of year-end 2022. The industry has seen favorable loss experience in each of those years.

Florida Chamber of Commerce Vice President of Government Affairs Carolyn Johnson said it’s not coincidental.

Businesses have made “significant efforts to provide workplaces that are safe for their employees so they can return home to their families safely at night,” Johnson told Florida Politics.

NCCI analyzes workers’ compensation data nationwide. In Florida, NCCI is the designated organization charged with annually submitting proposed rates to the Office of Insurance Regulation. Those rates are reviewed by actuaries on behalf of the state’s Insurance Commissioner, who can approve the NCCI recommendation or order it to be adjusted upward or downward.

NCCI did note in its analysis a potential upward pressure on medical costs resulting from a May 23 Division of Administrative Hearings Final Order

The proposed rate also takes into consideration changes in the medical fee schedule. The rates also included a lower profit and contingency factor — which reflects the higher investment returns expected in today’s interest rate environment.

A no-fault system, workers’ compensation precludes workers from suing their employers for causing their employees’ injuries. In exchange for the immunity from lawsuits, employers are required to provide injured workers access to the health care they need to heal.

Employers also must provide compensation for lost wages if an employee misses more than eight days of work due to an on-the-job injury. And employees who miss more than eight days of work because of the injury also are compensated for lost wages.

Workers’ compensation impacts a large and disparate group of interests, including business groups, labor unions, insurance companies, hospitals, physicians, ambulatory surgical centers, plaintiffs’ lawyers, and injured workers.

Not surprisingly, it’s an issue that the Legislature often is asked to delve into.

But rates in Florida have gone down six consecutive years and appear to be going down for a seventh.

“I don’t anticipate workers’ compensation legislation in ’24,” Herrle said.