Florida purgatory on workers’ comp: What comes next?

The 2017 Florida Legislature was destined to consider and enact comprehensive workers’ compensation reform, right?

Before the session, that was the impression from media outlets, interest groups and policy gurus. The pre-session chatter — after the Florida Supreme Court decisions in Westphal v. St. Petersburg and Castellanos v. Next Door Co. — all but demanded action.

Yet there was simply too much distance to cover with too little time left.

In the final hours of legislators’ 60 days in Tallahassee, as the reform package bounced back and forth between the House and Senate, the glimmer of hope held by so many was finally snuffed out.

As a result, Florida finds itself in a reform purgatory, with a judicially approved 14.5 percent rate increase, attorneys’ fees free to run amok, and the business community left with uncertainty.

In fairness to the Legislature, rarely has Florida seen a complete and comprehensive overhaul of a government-managed process when lawmakers convene for their annual 60-day session. Add to the time constraints of the calendar, the fact that the majority of legislators were not in office in during previous reform efforts. Such circumstances made reform during the 60 days increasingly unlikely.

Success also depends on whom you ask. Some will consider this lack of reform a massive success; others will say the sky continues to fall for Florida businesses. Yet if you review the discussions and debates in Tallahassee, it’s fair to say that lawmakers and interested parties did not shy away from examining the major components of what make up Florida’s workers’ compensation — everything from a proposal to eliminate the National Council on Compensation Insurance, which is responsible for recommending rates to Florida’s Office of Insurance Regulation, to moving to an openrating system, to having a pure claimant-paid fee scenario.

Finally, let’s celebrate success when we can. We did see some related reform efforts pass. House Bill 1107 — the work of Rep. Ben Albritton and Sen. Keith Perry — is waiting on final action by Gov. Rick Scott. This important legislation exempts from public records the personal information of injured workers who file claims for workers’ compensation.

Does this seem like a small step forward? Perhaps, but it is significant: It will ensure that when workers are injured on the job — and work with their employers, medical teams and insurers to get the necessary care in order to be made whole — they will not be bombarded by phone calls and direct-mail pieces promising that they’ll get rich off of the injuries.

To look forward, let’s look back: Before 2003, Florida was ranked as one of the worst states in the country for workers’ comp. It had the highest rates with the lowest payouts — a perfect storm of a poorly functioning government program. Florida wasn’t growing. New businesses weren’t relocating to the state. Small businesses were suffering. The reform in 2003 was significant, and lasting.

Then in 2016 a 14.5 percent rate increase on workers’ compensation insurance was approved by the Office of Insurance Regulation and upheld by the First District Court of Appeal, a stinging and significant cost for Florida businesses. And while it might be popular to portray the business community as the big and bad actors, this is based on ignorance. The reality is that it costs employers money to put people to work, and businesses are required by Florida law to provide workers’ comp to their employees. And for some businesses, that 14.5 percent rate may be too much to withstand.

Personally, I don’t see a situation where this conversation goes away. Not only is Florida rapidly approaching a major election cycle, but the state will also have roughly a year’s worth of data and real-life stories to exhibit the true impact of the 14.5 percent rate increase and, with it, the resulting free-for-all for attorney fees. Let’s see how the insurance carriers, businesses and attorneys respond.

From our perspective, Associated Builders and Contractors will be working with our members, small and large as they navigate this new norm. We’ll gather the feedback and data the Legislature needs to move forward in this discussion. I don’t see how it goes away.