Largely because of two recent court decisions, workers’ compensation premiums in the Sunshine State, which had fallen over 60% since 2003, will go up by 14.5%.
Both court decisions involve the 2003 reforms, which had been a boon for businesses while they dramatically affected worker benefits. In Castellanos v. Next Door Company, the Florida Supreme Court invalidated the attorneys’ fee structure in the new law. The case involved an injured worker who received a modest settlement. Under existing law, which used a flat percentage of the settlement, his attorney was paid only $1.53 an hour while the insurance company attorneys received almost 20 times that amount. The justices declared that the system ran afoul of workers’ rights under both state and federal due process, because the paltry fee effectively denied them adequate representation.
At roughly the same time, in Westphal v. City of St. Petersburg, the Florida Supreme Court considered the benefits limitations in the new workers’ compensation law. In 2003, the Legislature both cut disability benefits in half and shifted the burden of proof to victims. The injured worker in this case was unable to return to work after 104 weeks, the cutoff under the new law. And, since he could not prove that he would be totally disabled when he reached maximum medical improvement, the judge denied permanent disability benefits. The Supreme Court declared that the new section 440.15(2)(a) was unconstitutional, and ordered that the Workers’ Compensation Board go back to the old 260-week cap.
Based on these changes, the National Council on Compensation Insurance initially requested a 19.6% rate hike. But the Office of Insurance Regulation said that increase was too steep and that a smaller one could cover the new costs associated with Castellanos and Westphal. The NCCI said it would lobby legislators to reverse these two cases and fully reinstate the 2003 law.
Workers’ Compensation System
The United States Supreme Court recently declined to hear Stahl v. Hialeah Hospital, a case which essentially said that, because of benefits cuts, the Florida workers’ compensation system was no longer a reasonable alternative to a tort litigation system. Mr. Stahl was hurt at work just a few months after the 2003 reforms took effect. Because he did not meet the PTD (permanent total disability) criteria, he received $5,000 for a career-ending injury. The 1st Court of Appeals denied relief in a brief opinion, the Florida Supreme Court denied jurisdiction in the matter, and the United States Supreme Court denied hearing without explanation. Justin Parafinczuk, an insurance company lawyer, defended the system, pointing out that injured workers do not have to prove fault and the insurance companies cannot claim contributory negligence as a defense.
These are very good points, and the promise of expedited claims that were easier to prove in court is the main reason that workers gave up the right to sue for noneconomic damages in court. But Mr. Parafinczuk’s arguments only tell part of the story.
From 1993 to 2003, benefits increased about 50%. But from 2003 to 2013, benefits declined in real terms because the meager increases did not keep up with inflation. At the same time, medical costs increased rapidly. So, because of the 2003 reforms, injured workers had less money to pay bigger bills. As mentioned earlier, premiums have dropped by over 60% since 2003, and most companies have pocketed these savings instead of passing the money on to victims.
Compensation Available
Now that premiums are finally going back up, there should be more money in the system to compensate injured workers for:
- Occupational Diseases: Joint pain, repetitive stress disorder, carpal tunnel syndrome, and other conditions occur over the course of more than one work shift. The best practices is to file written notice of injury with an employer as soon as the doctor issues the diagnosis, whether or not the doctor says anything about the condition being work-related.
- Trauma Injuries: Strains and sprains are the most common types of claims, and falls are the most serious types of injury.
Workers’ compensation pays all the medical bills associated with both these injuries, from the emergency room bill to extensive physical rehabilitation.
Workers’ compensation normally pays benefits for 260 weeks or until the victims reach maximum medical improvement, whichever comes first. During recovery and rehabilitation, most injured victims receive two-thirds of their average weekly wage. If there is a permanent disability or a wrongful death, the victim (or the victim’s family) typically receives a lump-sum payout or an annuity.
In a few cases, injured workers can sue outside the workers’ compensation system and obtain money for their noneconomic damages, such as loss or enjoyment in life and emotional distress. For example, the employer may have been extremely reckless and intentionally put the victim in danger, or a defective product might have caused the injury.
To obtain maximum benefits for workplace injuries, contact Barnett, Lerner, Karsen & Frankel.