State businesses are seeing a dramatic decline in workers’ compensation rates in January, according to the Office of Insurance Regulation. The Office announced the approval of a 13.8% decrease in workers’ compensation insurance rates in 2019. The Office boosted their proposed rate cut of 13.4% from August by the National Council on Compensation Insurance.
A formal step of the filing was required to be made by Wednesday that will lower workers’ compensation rates again after a 9.5% decrease in 2018.
The decrease is said to be in line with what other states are offering, and this is due to a long-term decline in claims. The Office of Insurance Regulation released the 10-page order, citing the continued decline in claims for the key reason to lower rates.
Safer workplaces, increased efficiency and automation are three of the main reasons for workplace injuries declining. The decline is expected to continue, according to the report. A decline in rates is good for businesses that are trying to reduce their overhead.
“Workers’ Compensation Benefits include medical expenses, lost wages, vocational training, and survivor benefits,” explains DePaolo & Zadeikis.
Regulators are tasked with looking at numerous factors when deciding to lower rates. The cost of benefits is just one of the factors considered. A drop in the number of injuries over the past few years, along with increased legislation, have helped push rates lower.
Jeb Bush was responsible for the 2003 overhaul of Flordia’s workers’ compensation system. The move resulted in protests, but it helped lower the rates that businesses were paying. The move by Bush resulted in numerous lawsuits for labor unions due to the reduced benefits that were being offered as a result of lowered rates.
Caps on attorney fees were also instituted by Bush’s reforms, and this led to a 60% rate reduction by 2015. The problem is that the Castellanos v Next Door Company case found that the attorney fee schedule that has been in place for years is unconstitutional. The schedule does not allow for due process to occur properly.
Rates were increased 14.5% following to major court cases in Florida before being reduced in 2018 and again in 2019. The cases found many limitations in benefits to be unconstitutional, but insurance companies do not expect the cases to increase costs for several years. Florida also approved a 1.8% in May due to President Donald Trump’s Federal Tax Cuts and Jobs Act that aimed to lower tax rates for corporations and create jobs.