New Year, New Workers Compensation in Florida

By Reid Rushing | President of Insurance

Effective January 1, 2018, The National Council on Compensation Insurance (NCCI) has approved a statewide overall rate decrease of 9.5%. This applies to both new and renewal workers compensation policies effective in Florida. This means that over all of the class codes in Florida, there is an average decrease of 9.5%. Some classes of business may see higher decreases while some may experience no decrease or a slight increase in rate.

In 2017, NCCI granted a 14.5% Rate increase after the Supreme Court decision in two big Workers’ Comp cases – Catellanos v. Next Door Company and Westphal v. City of St. Petersburg.

In Catellanos v. Next Door Company, the Supreme Court found that the attorneys’ fee schedule for workers’ compensation cases were unconstitutional under both Florida’s and the U.S constitution as a violation of due process. In Westphal v. City of St. Petersburg, the high court struck down the state’s statutory 104-week cap on temporary disability benefits as being unconstitutional.

Both of these court cases were expected to have a dramatic increase in the numbers of claims and the total cost of claims over the next few years, but we have yet to feel the major blow to the workers’ compensation market at this time. Some still feel that the impact has yet to be felt, and some industry experts believe that the impact is still to come in the future as change in the laws play out.

For now, NCCI felt the decreases were necessary and they filed their amended rate filing to the Office of Insurance Regulations on November 7, 2017.

Some of the most impacted classes of business for the Rate Reductions are:

Contracting

5183 Plumbing NOC & Drivers (10.6% Decrease)

5190 Electrical Wiring – Within Buildings (8.5% Decrease)

5537 HVAC and Refrigeration Systems (7.6% Decrease)

Office

8601 Architects or Engineering Firm (11.4% Decrease)

8820 Attorney’s Office (23.7% Decrease)

8832 Physicians & Clerical (10.4% Decrease)

Mercantile

8010 Store: Hardware (11.5% Decrease)

8017 Store: Retail NOC (8.7% Decrease)

8018 Store: Wholesale NOC (11% Decrease)

Other

3632 Machine Shop NOC (13.4% Decrease)

9082 Restaurant NOC (10.2% Decrease)

The other changes this year are the Minimum and Maximum weekly remuneration for officers. The following chart explains the differences:

Classification

Max Remuneration – Executive Officers
Min Remuneration – Construction Officer
Min Remuneration – All Other Officer
Sole Prop & Partnerships (no min or max)

2017 – Weekly/Yearly

$2500 / $130,000
$400 / $20,800
$850 / $44,200
$43,800

2018 – Weekly / Yearly

$2700 / $140,400
$450 / $23,400
$900 / $46,800
$46,100

With the changes in the overall rates, most insureds will be seeing a reduction in the yearly premium. Others may find their premiums go up either due to an increase in their rates or increase in how the compensation of the owners is calculated.

If you have questions about any specific class code, please do not hesitate to contact us. NCCI determines the class code of an employer based on the industry they are in, they then determine the rate for that class code based on the state as a whole for those class codes.