FILE - Florida capitol

The Florida capitol buildings in Tallahassee.

Florida’s workers’ compensation rates will decline for the third consecutive year in 2020 if the state’s Office of Insurance Regulation (OIR) follows a national insurance rating bureau’s recommendation.

The National Council on Compensation Insurance (NCCI) has filed its annual proposal with the OIR that calls for an average 5.4 percent rate decrease for state employers, effective Jan. 1.

Following a 14.5 percent increase in 2016, Florida’s workers’ compensation rates have gone down by a combined 13.8 percent since – by 9.5 percent, plus an additional 1.8 percent as a result of the Federal Tax Cuts and Jobs Act (TCJA), in 2018, and by 13.4 percent beginning January 2019.

In its analysis, the NCCI cited “technology, safer workplaces, improved risk management and a long-term shift from manufacturing to service sectors” as reasons for its proposed 5.4 percent rate decrease.

“NCCI has no expectation that this trend will change course,” it said.

The NCCO said 90 percent of the claims data it analyzed to formulate its recommendation was accumulated under policies that went into effect after the Florida Supreme Court’s 2016 ruling in Castellanos v. Next Door Co.

In that case, a lawyer awarded the equivalent of $1.53 an hour for more than 107 hours spent pursuing a claim for a Miami man challenged a state law capping attorney fees in workers’ comp cases.

The court determined the state law violated constitutional due-process rights because it didn’t allow for appealing the “reasonableness” of fee awards.

In the wake of the ruling, the OIR subsequently approved a 14.5 percent rate increase that took effect in December 2016, prompting business and insurance groups to lobby lawmakers to reinstate some fee restrictions.

Despite the post-Castellanos rate decreases in 2018, 2019 and, likely, in 2020, NCCI stated in its analysis that “the full effects of that [court] decision will still not materialize for several years to come as workers compensation insurance is a ‘long-tail’ line that often involves a long period of time for claims to be resolved.”

Reinstating workers’ compensation fee caps has been a priority for the Florida Chamber of Commerce, Associated Industries of Florida and the National Federation of Independent Business, among others, for the last three years.

Two bills seeking to reform the state’s workers’ comp system were proposed during the 2019 legislative session failed to make it out of committee.

House Bill 1399, sponsored by Rep. Cord Byrd, R-Neptune Beach, proposed reducing workers’ compensation insurance rates 5 percent by allowing employers to deviate from state-set rates by tying payments to rates established for Medicare.

HB 1399 would have allowed for a judge to dismiss a petition if a claimant or claimant’s attorney fails to make “a good faith effort” to resolve a dispute before seeking litigation.

The proposed bill required insurers to provide the total amount of attorney hours and fees paid for petitions, and tied outpatient surgery, care and hospitalization reimbursement to a percentage of Medicare rates which, Byrd maintained in committee hearings, is how employers could reduce workers’ compensation insurance rates by 5 percent.

In addition, HB 1399 clarified caps on temporary total disability benefits for the first time since another 2016 Florida Supreme Court decision, Westphal v. City of St. Petersburg, found the state’s 104-week cap on temporary total disability benefits was unconstitutional.

HB 1399 proposed placing a 260-week cap on total temporary benefits, but allow an additional 26 weeks if an injured worker has not reached “maximum medical improvement” by the end of those five years.

SB 1636, sponsored by Sen. Keith Perry, R-Gainesville, was similar to HB 1399 but did not provide a 26-week extension and capped attorney fees at $150 an hour and limited overall payment to $1,500.