Millions will pay more to be insured

TALLAHASSEE — Millions of Floridians will feel the pinch in their pocketbooks now that the calendar has turned to 2017, as higher rates for some of the top property and health insurers in the state are set to take effect.

The top five property insurers in the state — Universal, Citizens, Security First, Federated National and Heritage — have been approved by state regulators for statewide average rate hikes of between 5.5 percent and 10 percent for residential homes.

Property insurers say the reason for the increases has nothing to do with Florida’s first two hurricanes hitting the state in more than a decade.

They say a practice known as “assignment of benefits,” in which homeowners sign over claim benefits to a contractor during an emergency, such as a busted pipe leaking water in the house, is being abused

by contractors who inflate damage.

“We have seen a dramatic increase in water-loss claims and with that an increase in litigation costs surrounding those claims,” said Michael Peltier, spokesman for Citizens Property Insurance Corp., a state-run company with the second-most policies in the state.

Private insurers agree. Although the problem began in South Florida, it’s moving to Tampa and Orlando, said Lisa Miller, a Tallahassee lobbyist for several private carriers.

“All policyholders are paying for the actions of a few who are cheating the system and costing all of us higher premiums,” Miller said. “We have to get a handle on this assignments of benefits issue.”

Legislation to cap attorneys fees and crack down on fraud in water claims has been filed the last two years but hasn’t gained much traction in the Capitol. Trial-attorney groups and contractors have said insurance companies are overselling the problem.

Amid uncertainty over the fate of the Affordable Care Act, or Obamacare, costs for health care plans from private companies offered on federal exchanges are going up as well.

The 1.3 million Floridians buying health plans through federal exchanges will see an average premium increase of 19 percent.

The statewide average monthly premium for exchange plans will rise from $358 to $458 per month, according to state data. But federal subsidies for the plans mean customers won’t have to pay the full amount of the increase.

Although the cost of Obamacare is going up, it could soon be gone completely. President-elect Donald Trump has vowed to repeal the law, and congressional Republicans have floated plans to pass a law removing Obamacare in two years and replacing it with a new system.

Still, seven insurers that offer coverage both on and off the exchange were approved for rate increases averaging 20 percent overall, consistent with increases solely on the exchange.

Even opponents of the controversial law say they recognize the law will stand for the next year, despite Trump’s victory.

“Even though it seemed to happen overnight it’s not going to go away overnight,” said Bill Herrle, Florida executive director of the National Federation of Independent Businesses, a small-business-advocacy group that lost its lawsuit attempting to overturn Obamacare in 2012.

Business owners in 2017 also will watch for a 14.5 percent statewide average hike in worker-compensation rates. The higher rate took effect Dec. 1, but the Office of Insurance Regulation applied it gradually so that it takes effect only when a business renews its policy throughout the year.

The rate hike is the largest in recent years, because of a Florida Supreme Court decision in May striking down a 2003 state law capping attorneys’ fees in worker-compensation cases.

“We’re concerned that it will dampen job creation in the state,” Herrle said.

Other taxes and costs to business and consumers will remain flat or increase only slightly in the new year.

Workers paid the minimum wage will get an extra 5 cents per hour, a total of $8.10. Tipped employees’ wages will rise to $5.08 per hour. That’s $104 more over the course of a year for a full-time employee working 40 hours per week.

The state gas tax is increasing just a tad, by one-10th of a penny per gallon.

Both the minimum-wage and the gas-tax increases are because of inflation.

Unemployment taxes paid by businesses, however, will remain stable. The minimum rate will stay at $7 per employee and the maximum rate will continue at $358 per worker for the coming year.

Herrle