FILE - Florida State Capitol

The Florida State Capitol buildings (Old Capitol in foreground) in Tallahassee.

(The Center Square) – Despite concerns about some private insurers rejecting COVID-19 claims, Florida employers likely will see a workers' compensation rate decline for a fourth consecutive year in 2021.

The National Council on Compensation Insurance (NCCI), which proposes annual state rate filings, has recommended the Florida Office of Insurance Regulation (OIR) reduce workers' compensation premiums employers pay by an average of 5.7 percent in 2021.

After a 14.5 percent increase in 2016, Florida’s workers’ compensation rates decreased by 9.5 percent in 2018, 13.8 percent in 2019 and 7.5 percent in 2020.

NCCI cited “unprecedented results” in safety among reasons for reducing rates.

“For decades, with few annual exceptions, frequency (of claims) has continued on a clear downward path driven by technology, safer workplaces, improved risk management and a long-term shift from manufacturing to service sectors,” NCCI said. “NCCI has no expectation this trend will change course.”

OIR will review NCCI’s recommendations before setting rates effective Jan. 1. It does not always follow NCCI’s recommendations. This year, OIR approved a 7.5 percent decrease after NCCI proposed a 5.4 percent reduction.

“As always, OIR will review the filing to ensure the proposed changes are not excessive, inadequate or unfairly discriminatory and evaluate its potential effects on the insurance marketplace and employers, who are required by law to carry this insurance on their employees,” OIR said.

NCCI said how COVID-19 will affect workers' compensation rates “is in the very beginning stages of being understood; therefore, the data underlying this filing does not include claims from COVID-19. Due to the lack of this COVID-19-related ratemaking data and the current level of uncertainty, NCCI has not yet assessed the potential impact on future rate levels.”

Emerging trends, however, are not good news for small businesses: private insurers, who write most workers' compensation insurance policies, are denying a significant percentage of claims, which have been increasing since June in Florida.

According to a Florida Division of Workers’ Compensation (DWC) report from August, DWC received 11,872 workers' compensation indemnity claims as of July 20, with 2,862 filed between June 20-July 20 and 3,492 filed between May 20-June 20.

By comparison, 13 workers' compensation indemnity claims were filed with DWC in January and 35 claims in February.

Of those nearly 12,000 claims, 43 percent were denied, including from 4,345 claims from “protective service workers” and 3,432 claims from health care workers, with 62 percent of denials issued by private insurers.

In its Overview of 2020 Legislative and Regulatory Activity analysis, NCCI said it has tracked more than 1,110 federal and state COVID-19 insurance-related legislation and regulations since March.

As of July 31, NCCI said at least 20 states have considered workers' compensation bills related to COVID-19 that address benefit determinations for contraction of, or exposure to, the novel coronavirus in a “presumption” the exposure occurred because of the nature of the person’s employment.

NCCI reported eight states – Alaska, Illinois, Minnesota, New Jersey, Utah, Vermont, Wisconsin and Wyoming – have passed legislation establishing “presumptions of compensability” for COVID-19 for certain workers.

Similar bills are pending in California, Colorado, Kansas, Louisiana, Massachusetts, Michigan, New York, North Carolina, Ohio, Pennsylvania, Rhode Island and South Carolina, according to NCCI.

Eleven states have issued executive orders, directives or emergency rules related to presumptions and/or compensability, including Florida.

Some private insurers, however, are balking at a “presumptions of compensability” for COVID-19-related workers' compensation claims.

Of workers' compensation indemnity claims filed by July 20 in Florida, private insurers denied 55 percent compared with a 30 percent denial rate by private self-insured funds and a 31 percent rejection rate by government self-insured funds.