Florida Businesses Lose Out to Insurance Companies


As a workers’ compensation attorney for injured workers, I’m generally perceived by employers to be “on the other side” and thus, the enemy of sorts. Of course, I can present a very clear and cogent position that my role in the work comp system is to actually make sure the insurance company that took the employer’s premium payment for work comp coverage actually provides the necessary benefit to the employer’s worker when an accident happens. After all, isn’t that in the best interest of the employer? To have insurance coverage that provides timely medical treatment and temporary benefits to their injured workers so they can get better and go back to work? Why pay for coverage that doesn’t cover? My job is to make sure the insurance company pays legitimate claims. So, employers can and should view me just as easily as an ally rather than foe. (There will be those that try to argue, “Yeah, but what about all those claims that are not legitimate?” To this, I remind everyone, I do not get paid unless my client wins. Therefore, it is not in my interest, or the employer’s, to pursue claims that are not real and thus, not winnable.)

Along the same lines, the recent arguments by the Florida Chamber of Commerce, Associated Industries, and other organizations professing to look after the interest of Florida businesses have an abundance of the same misplaced blame directed at attorneys for injured workers.

Since October, Florida businesses have been bracing themselves to absorb the 14.5% workers compensation rate increase set to take place on December 1, 2016. The Insurance Commissioner approved the rate increase based on recommendations of the National Council on Compensation Insurance (NCCI), the organization that files rate proposals for almost all of Florida’s work comp insurance carriers. Business organizations all across the state have opposed this increase and espoused the negative impact this will have on our economy, especially the viability of our financially vulnerable small businesses. Because NCCI blamed the majority of the need for an increase on the Florida Supreme Court ruling finding the cap of attorney’s fees to be unconstitutional, the sentiment expressed by many business organizations is the same old, tired rhetoric about the greediness of the plaintiff’s bar and the resulting cost to Florida’s employers. It’s time for Florida businesses to wake up and see what is really going on, at least with regards to the workers’ compensation rate making process in our state.

Just last week, Circuit Court Judge Karen Gievers ruled in a case initiated by Jim Fee, a small business owner and workers’ compensation attorney, that the 14.5% rate increase scheduled to start on December 1, 2016 is void ab initio due to violations by the Office of Insurance Regulation (OIR) and NCCI of Florida’s Sunshine Laws. (Void ab initio just means that it is not legal from the start, and thus the rate cannot be legally implemented.) In other words, Judge Gievers found the secret and non-noticed meetings of NCCI and OIR about how much to raise work comp rates had “the effect of shutting the public out of meaningful participation in the rate making process.” Hurray! Florida businesses do not have to be burdened on December 1st with an increase in work comp premiums! Merry Christmas and many thanks to Mr. Fee!

Well, wait just minute. Certain leaders of Florida business organizations are not celebrating for some reason. In fact, they are going so far as to complain that this lawsuit and Judge Gievers ruling is just another example of a greedy trial lawyer trying to line his pockets. “Today’s opinion on workers’ comp is just another tactic by the unscrupulous trial bar to put blinders on the Legislature and conceal the ridiculous fees they extract from the workers’ comp system.” See comments by Bill Herrle, executive director of the small business group NFIB/Florida- http://www.news.wjct.org/post/judge-blocks-florida-workers-comp-rate-hike)

Really? This statement is ridiculous and flies in the face of facts and reason on a number of levels. First, the type of lawsuit that was filed by Mr. Fee requested no money from anyone, only a finding that Sunshine Laws were being violated and an injunction against OIR implementing the 14.5% increase that businesses were also objecting to. Not only will Mr. Fee not get any money out of this lawsuit to line his pockets, numerous hours and significant money has been expended in order to obtain this protection for his business and that of other Florida businesses. Second, Mr. Fee’s lawsuit and Judge Gievers ruling gave Florida businesses (BTW-the constituents of NFIB/Florida) the ammunition to fight the complained about rate increase. Florida businesses were correct to complain about the rate increase. There has been no actuarial sound support provided by OIR for the increase that will only serve to enrich the insurance companies while hurting Florida’s economy.

However, no one in the Florida business world knew how to attack this problem at its source nor cared to dig deep enough to find out what was really going on. The leaders of most of Florida’s business organizations took an easy path of jumping on the “Blame the Laywers” bus and called for the Legislature do something with this greedy bunch. Well, that is how things were handled in 2003, and look where it got us – two back to back decisions this year about the unconstitutionality of reform measures taken back then. (And, no, we do not have an activist Supreme Court with a hidden agenda of making the plaintiff’s bar richer and richer. Those that believe this conspiracy fail to read the variety of decisions that come out of that Court and quite possibly have not read “Castellanos” or “Westphal” to be able to form their own opinions.)

Then, along comes Mr. Fee. He does the research and finds out that NCCI and OIR are supposed to hold their discussions about any changes to work comp rates in the public so there is oversight and accountability in the process of establishing rates that take money out of the pockets of Florida businesses. That makes sense. Why shouldn’t Florida businesses be entitled to know the evidence supporting a change in rates? These meetings aren’t supposed to take place in secret, but rather be noticed and open to the public. Surely, Mr. Herrle is not suggesting that its ok for insurance companies to take money away from Florida businesses based on secret meetings behind the curtain? I’m not sure how else to interpret his comments.

A Notice of Appeal in Mr. Fee’s case to help Florida employers was filed this week by the Office of Insurance Regulation requesting that OIR and NCCI be allowed to continue to meet in private and set work comp rates by secret meetings. OIR wants to also go ahead and make Florida businesses pay the 14.5% increased rate that was arrived at in violation of the Florida’s Sunshine laws. In other words, our insurance commissioner has decided the interests of insurance companies are more important than those of Florida’s businesses. There’s so many reasons to love our state, but this is not one of them.

The opinions expressed in this blog post are that of the author and do not necessarily reflect those of other members of the firm.


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