Florida employers will see reductions in their workers’ compensation rates for the coming year, but it remains to be seen how much of the rate cut demanded by Florida’s top insurance regulator remains to be determined.
While the National Compensation Insurance Council (NCCI) proposed an average rate reduction of 8.4% reporting strong outlook for 2023, Florida Insurance Commissioner David Altmaier is urged to secure low rates in 2024 and beyond for the Florida roofing industry.
Florida Roofing and Sheet Association President Matthew Criswell said friday he fears that rate increases will occur in the future.
“Today we are here to ask for stability in our rate code,” he said, noting that a tight reinsurance market, “significant” increases in medical costs, the housing windfall and of construction, and the Great Resignation, which left the industry with less-experienced labor, could lead to future rate increases if the state does not intervene.
“Because of all of this, we are here today due to the uncertainty in the insurance market, we are requesting that consideration be given to freezing the current rate class code (of roofers),” said Criswell at Friday’s virtual public meeting on the proposed average 8.4% reduction in workers’ compensation rates recommended by the NCCI.
NCCI is a licensed rating agency authorized to recommend rate filings on behalf of workers’ compensation insurance companies in Florida. NCCI filings are prepared objectively, using widely accepted actuarial rating methodologies.
Altmaier, however, made no promises.
“We’ll make sure your comment is recorded and taken into account as we continue to analyze the case, so thank you for that,” Altmaier told Criswell.
Criswell was the only person besides NCCI representatives to testify at the September 23 public tariff hearing. However, Altmaier said the OIR would accept public testimony on the NCCI’s proposed case until October 7.
NCCI’s recommendation is based on experience data for policy years 2019 and 2020 that was available as of December 2021. It excludes all data on COVID-19 claims.
The proposed reduction is due in part to the continued decline in the frequency of lost time claims or claims when an injured employee receives wage replacement benefits. But the analysis noted that there has been an increase in medical inflation.
The Medicare and Medicaid Service Centers estimates that the personal health care index will rise in 2022 and then fall between 2.5% and 3% thereafter.
NCCI said a national review of workers’ compensation data shows drug costs are falling, but physician and facility costs are rising.
Workers’ compensation affects a wide and disparate group of interests, including business groups, unions, insurance companies, hospitals, physicians, outpatient surgery centers, plaintiffs’ attorneys and injured workers. Workers’ compensation is meant to be self-enforcing, benefiting both employer and employee.
A no-fault system, workers’ compensation prevents workers from suing their employers for causing injury to their employees. In exchange for immunity from lawsuits, employers are required to provide injured workers with access to the health care they need to recover.
Employers must also provide compensation for lost wages if an employee misses more than eight days of work due to a workplace injury. And employees who miss more than eight days of work due to the injury are also compensated for lost wages.
NCCI Director of State Relations, Dawn Ingham, said Florida employers have seen a 71.4% cumulative reduction in their workers’ compensation rates since October 2003, when a law that made sweeping changes to the system, including strict limits on Plaintiffs’ Counsel Fees, was enacted.
The Florida Insurance Commissioner is responsible for setting workers’ compensation rates that insurance companies can charge employers for mandatory coverage. The 8.4% discount offered by the NCCI is only a recommendation. The OIR verifies the recommended public meeting and the commissioner will eventually issue an order either accepting the proposed rate or directing the NCCI to make adjustments to its recommendations and file a new proposed rate, which usually happens.
If Altmaier approves the 8.4% reduction recommended by the NCCI starting in January 2023, workers’ compensation rates in Florida will have fallen by nearly 74% over a 20-year period.
Members of the public wishing to comment on NCCI’s proposed rates should email the RIO at [email protected]. “NCCI Rate Deposit” must be included in the subject line.
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