National Study Shows Legislative Reform Necessary to Reduce Workers’ Compensation Rates in Florida
TALLAHASSEE, Fla. – The Florida Office of Insurance Regulation (Office) today acknowledged a study released this week from the Oregon Department of Consumer & Business Services (DCBS) showing Florida had jumped 11 spots from the 40th to 29th most expensive state for workers’ compensation insurance. The study compared each state’s rates to the national median rate of $1.88 per $100 of payroll – Florida’s rate of $1.82 is below the median.
“The Oregon study provides further evidence that we need to be proactive in considering legislative options to keep Florida’s workers’ compensation rates nationally competitive,” remarked Kevin M. McCarty, Florida’s Insurance Commissioner. “Our Office is committed to working with the Florida Legislature to address these cost drivers. Keeping workers’ compensation rates affordable is critical for the financial health of Florida’s businesses, continued job growth, and Florida’s overall economy.”
Although Florida’s rates are below the national average and represent a vast improvement from the period prior to the 2003 reforms, the Oregon study further validates that cost drivers in the system are contributing to rate increases, a pattern that has become more pronounced in the last three years. During the October 4th National Council on Compensation Insurance’s (NCCI) hearing, the Office expressed support for finding legislative options aimed at reforming the system. The cost drivers that could be addressed include drug repackaging, and reimbursement costs associated with in-patient/out-patient hospital care and ambulatory surgical centers.
Following the legislative reforms in 2003, Florida experienced a significant and steady decline in workers’ compensation insurance rates for seven years. In 2010, this trend reversed and rates began to climb, as evidenced by increases of 7.8% in 2010 and 8.9% in 2011. The NCCI annual rate filing for 2012 reflects a pending rate request increase of another 6.1%.
To learn more about this issue in Florida, visit the Office’s Workers’ Compensation page or read the Office Statement from August 23, 2012.