Workers’ Compensation –
Selected State Issues
Dan Sumner, Assistant Director
Division of Workers’ Compensation
Florida Department of Financial Services
March 10, 2005
New Orleans, Louisiana
1
Florida Undergoes Major Changes
In Workers’ Compensation System
–
July 1, 2002: Department of Labor and Employment
Security abolished. Division of Workers’ Compensation
transferred to Department of Insurance.
–
January 1, 2003: Florida Department of Insurance part
of new Department of Financial Services and Office of
Insurance Regulation.
• Division of Workers’ Compensation under DFS,
headed by Chief Financial Officer.
–
SB 50-A – 2003 Workers’ Compensation Reform –
Major Provisions Effective October 1, 2003.
2
Cumulative Rate Change (%)
Florida’s Historical Rate
Changes
40
31.20
30
20
12.90
10
0
No
Filing
7.20
No No
Filing Filing
No
1.50 2.50 Filing 2.70
-2.10
-10
-20
-10.60
-5.10
-11.30
-14.00
-30 -25.00
Sep- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Apr- Oct- Jan90 91 92 93 94 95 96 97 98 99 00 01 02 03 03 05
Effective Date
3
Cost Drivers

Attorney Involvement

Permanent Total/Indemnity Benefits

Medical Costs
4
Changes to Attorney’s Fees

Eliminates provision that allowed for
hourly fees; except for medical only
cases. Maximum hourly fee is
$1,500 @ $150 per hour.

Attorney retainer agreement cannot
exceed statutory fees.
5
Changes to Attorney’s Fees

Attorney fees paid by the carrier will
be calculated only on the amount
secured above those specified in the
offer to settle. 20% of first $5,000,
15% of next 5,000. 10% of
remaining amount to be provided
during first 10 years after claim
filed, 5% of benefits secured after
10 years.
6
SB 50-A: Impact on Litigation

Petitions Filed, FY 2003/04
–

127,548 (-15.42%)
Unrepresented Claimants:
–
Pre-
Post
10/01/03
2.96%
10/01/03
2.78%
7
Changes to Indemnity
Benefits

Permanent Total
–
–
Eliminated Social Security eligibility
standard.
Established higher threshold to meet PT
eligibility: scheduled injury or not able
to engage in at least sedentary
employment within a 50 mile radius of
employee’s residence, due to physical
limitations.
8
Changes to Indemnity
Benefits
PT benefits end at age 75; exception
for not having worked enough to be
eligible for Social Security.
 PT supplemental benefits end at age
62; exception for not being eligible
for Social Security.
 Annual increase in PT supplemental
benefits is reduced from 5% to 3%.

9
Changes to Indemnity
Benefits

Permanent Impairment
–
–
–
Paid bi-weekly rather than weekly.
Increased from 50 percent to 75 percent of
the temporary total disability benefit amount.
Reduced by 50 percent for each week in which
the employee earned income equal to or in
excess of the employee’s average weekly
wage.
10
Changes to Indemnity
Benefits

Permanent partial impairment benefits for
psychiatric impairment are limited to one
percentage point in the permanent
impairment rating.

Compensation for Death
– Maximum funeral benefits increase
from $5,000 to $7,500.
–
Maximum death benefits increase from
$100,000 to $150,000.
11
Changes to Indemnity
Benefits

The duration of permanent
impairment benefits is as follows:
– Two weeks for each percentage
point from 1 to 10 percent;
– Three weeks for each percentage
point of impairment from 11 to 15
percent;
12
Changes to Indemnity
Benefits
–
–
Four weeks for each percentage
point of impairment from 16 to 20
percent;
Six weeks for each percentage
point of impairment from 21
percent or higher.
13
Changes to Medical Benefits
Increases maximum reimbursement
for physicians to 110% of Medicare.
 Increases maximum reimbursement
for surgical procedures to 140% of
Medicare.
 Hospital payments are reduced,
except for emergency procedures.

14
Changes to Medical Benefits

Increases maximum number of
chiropractic treatments to 24 treatments
within 12 weeks beyond initial
chiropractic treatment.

IMEs are limited to one per accident,
instead of one per specialty—cost borne
by requesting party; if employee prevails,
then carrier pays.
15
SB 50A: Employer Compliance


Out-of-state construction employer with
employees engaged in Florida must have
FLORIDA on Section 3A of the policy, and use
Florida rates, rules and forms.
Division Can Issue Stop Work Order for:
–
–
–
–
Failing to secure coverage.
Material misclassification.
Material underreporting or concealment of
payroll.
Failure to produce business records within
5 days of written request.
16
SB 50A: Employer Compliance

Definition of Independent Contractor
440.02(15)(c)3. “Employee” includes an
independent contractor working or performing
services in the construction industry.”

Exemptions – For Construction Industry:
Corporate officers or members of a LLC owning
at least 10% of stock or membership of
business can elect exemption. Only 3
exemptions per business and affiliated
businesses.
17
Electronic Reporting of Data

The Division is mandating electronic filing
of the following reports:
–

Proof of Coverage, Medical Billing, First Report
of Injury (Late ’05).
Centralized Performance System
developed to monitor and measure
performance electronically.
18
Electronic Reporting of Data

The Division is mandating electronic filing
of the following reports:
–

Proof of Coverage, Medical Billing, First Report
of Injury (Late ’05).
Centralized Performance System
developed to monitor and measure
performance electronically.
19
Proof of Coverage Database

On Division Website
www.fldfs.com/wc

Platform for Policy Tracking System
–
Currently 3,531 registrants tracking
13,953 policies.
20
Thank You
21