A 14.5 percent increase in worker’s compensation insurance premiums appeared to take effect in Florida Thursday, amid legal scrambling over whether the hike was illegal.
The legal situation was unresolved as of Thursday afternoon, but businesses were treating the increase as a fact of life.
The Florida Chamber of Commerce, for example, issued a written statement complaining that the increase, as applied to new and renewal policies written during the next 12 months, would cost employers $1.5 billion.
“Many businesses are telling us they will be forced to delay hiring, or even cut existing jobs, in order to cover this increase in their premiums,” Carolyn Johnson, director for business policy for the Florida Chamber of Commerce, said in a written statement.
“A rate like this puts Florida’s competitiveness and job creation directly at risk.”
The Florida Office of Insurance Regulation approved the increase in September, based on recommendations by the National Council for Compensation Insurance, or NCCI.
The office has designated NCCI as the ratings agency for workers’ compensation insurers in the state.
James Fee, a Miami worker’s compensation attorney, filed suit, arguing that NCCI’s quasi-official status required it to operate under Florida’s open-government laws.
Fee complained that the council failed to open its deliberations to the public or provide its data to an actuarial expert he’d retained.
Leon County Circuit Judge Karen Gievers agreed on Friday, and issued an order blocking the new rates from taking effect.
On Tuesday, Insurance Commissioner David Altmaier filed a notice of appeal to the 1st District Court of Appeal. His office said that filing placed an automatic hold on Gievers’ ruling.
Altmaier appeared to rely on language in Section 9.310(b)(2) of Florida’s Rules of Appellate Procedure, allowing such stays when sought by public bodies or public officers.
But the rules make an exception for appeals in public records and public meetings cases. In that event, the stay “shall exist for 48 hours after the filing of the notice of appeal.”
In other words, on Thursday.
A spokesman for Florida Workers Advocates, which represents workers’ compensation attorneys, said the organization believed the 48-hour rule applied.
Meanwhile, Johnson argued the rate hike amounts to a massive transfer of wealth from businesses to the workers’ compensation trial bar. NCCI and most business leaders blame the increase on escalating litigation costs — pointing to Florida Supreme Court rulings declaring unconstitutional business-friendly restrictions the Legislature approved in 2003.
Specifically, they cite Castellanos v. Next Door Co., striking caps on attorney fees in worker’s compensation cases.
“This accounts for nearly two-thirds of the rate increase,” the Chamber said. “And although the rate officially increases today, since the decision in April, the number of lawsuits and trial lawyer pay-days have already increased.”
Business and insurance leaders hope the Legislature will find a way around the Supreme Court rulings when lawmakers reconvene in the spring.