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May 27, 2016

 

 

 

 

 

 

 

 

 

 

 

WELCOME TO UPSA

United Pool & Spa Association (UPSA) was chartered in 1983 as a non-profit trade association. It was originally organized to serve the interests of commercial pool contractors and their associates, suppliers, and the engineers that design public pools. In recent years UPSA has expanded its membership to welcome solid residential swimming pool builders, as well as swimming pool service contractors, particularly those serving the commercial and public pool trade. 

UPSA exists to create and maintain a better business environment for the members. The association is active in government agency liaison and oversight, safety promotion, education and providing networking opportunities for all members. 

Submit your membership application today! 

  • Keep abreast of changes & challenges
  • Have a voice in the direction of YOUR industry
  • Continue to expand & sharpen your knowledge 
  • Participate in improving government relations

Be a part of a group working close with aquatic engineers

Bruce  

Workers' Compensation Update

  

  

 

 By: R. Bruce Kershner

UPSA Lobbyist

 

The Florida Supreme Court recently handed down a decision that will impact your workers' compensation insurance rates. The court ruled that the existing statutory provision providing for an attorney fee schedule in workers' compensation cases was unconstitutional. The National Council on Compensation Insurance (NCCI) released a request for a 17.1% rate increase across ALL class codes effective August 1, 2016. NCCI submitted its rate filing request to the Office of Insurance Regulation (OIR) on May 27, 2016. The proposed workers' compensation insurance rate increase must be approved by OIR. We will keep you updated on this very important issue as information becomes available.

For your convenience, the following is additional information provided by NCCI on this issue.


NCCI Proposes Florida Workers Compensation Rate Increase Effective August 1, 2016

Overview of Castellanos Decision

On April 28, 2016, the Florida Supreme Court issued an opinion in the case of Castellanos vs. Next Door Company, et al., No. SC13-2082 ("Castellanos") declaring Section 440.34, Florida Statutes, unconstitutional. The anticipated impact of the decision is the elimination of the statutory caps on claimant attorney fees and a return to hourly fees.

 

NCCI Proposes Rate Increase
NCCI estimates that the first year impact of Castellanos will be an increase in overall Florida workers' compensation system costs of 15%. This estimate does not include the following:

  • Impacts related to the First District Court of Appeal decision dated April 20, 2016 known as Miles v. City of Edgewater Police Department ("Miles") declaring unconstitutional certain restrictions on claimant paid attorney fees. After Miles, claimant attorney fees can be earned regardless of whether benefits are secured. Depending on the scenario, the source of claimant attorney fees could be the claimant, the employer/carrier, or both. Claimant attorneys may now have the potential to earn greater compensation than that which would result from the Castellanos decision on its own, putting additional upward pressure on system costs in Florida. NCCI is unable to separately determine the Miles impact.
  • The entire unfunded liability created in the state due to the retroactive nature of the Castellanos court decision.
  • Unanticipated cost impacts not otherwise reflected in this filing that may emerge over time such as additional stakeholder behavioral changes or interactions that may result in changes to workers' compensation benefits or practices in Florida.

On May 27, 2016, NCCI submitted its filing to the Office of Insurance Regulation (OIR). It includes components for two law changes:

  • First year impact for Castellanos of 15%
  • Impact of 1.8% in response to SB 1402 which ratified updates to the Florida Workers' Compensation Health Care Provider Reimbursement Manual

The combined impact of the two components is 17.1% or $623M (17.1 x $3.645B). NCCI proposes that the increased rates will apply to new and renewal policies that are effective on or after August 1, 2016. Additionally, NCCI proposes that the increased rates will apply to all policies in effect on August 1, 2016 on a pro-rata basis through the remainder of the term of these policies. Currently, Florida has a voluntary pure loss cost of 0.99 that is comparable to other states in the Southeast ranging from 0.94 to 1.14. If the rate filing is approved as filed increasing rates by 17.1%, Florida at 1.16 would rank as the highest state in the Southeast.

Retroactive Impact of Castellanos Decision is Not Part of Proposed Rate Increase

This Castellanos component of this filing only addresses the expected increase in Florida workers' compensation system costs for accidents occurring on or after August 1, 2016. However, the decision in Castellanos is also expected to increase overall system costs in the state for accidents occurring prior to August 1, 2016 that remain open or are re-opened. Because workers' compensation ratemaking is prospective only, insurers are not afforded the opportunity to recoup premium to cover such unforeseen increases in system costs. Therefore, it is expected that a significant unfunded liability will be created due to the retroactive impact of this court decision. NCCI is currently in the process of estimating the unfunded liability and will provide further information at a later date.

 

 

For additional information, please do not hesitate to contact the UPSA office.

Contact Information:

United Pool & Spa Association

P. O. Box 520156

Longwood, FL  32752-0156

(321) 295-7911 * (407) 260-1582 * Fax

  julie@upsaonline.com

 www.UPSAonline.com