Well, it is official. As reported here and elsewhere, workers’ compensation rates in Florida, where my company is based, are set to rise 14.5% on December 1, 2016. This is largely the result of two court decisions, which were largely the result of some really shortsighted legislative decisions, which were largely the result of greedy actions on the part of a select few who exploited the system for their own selfish gain, which was largely the result of some people screwing around with claims that should have just been paid to begin with.
After all, that is how we roll in the Sunshine State.
The two court decisions, commonly referred to as Castellanos and Westphal, are being equally blamed for the first of what will likely be numerous increases. I think that is a disservice, as Westphal, while eliminating an unreasonable cap on TTD, will only in reality affect a very small percentage of cases. No, Castellanos, which removed caps on injured worker’s attorneys’ fees, will be the really big rain maker in this state. It is estimated by some (well, by me, anyway) that employers and carriers now have an unfunded liability of as much as $2.18 billion from the reversal of these legislative reforms. Virtually all of that money will go to IW attorneys, casinos, hookers, Hillary Clinton and assorted sports car dealerships in the state.
(I’m just kidding. They won’t get the money in time to give any to Hillary Clinton.)
The ironic part is that the 14.5% increase I mentioned is not even intended for that now voluminous unfunded liability – insurers cannot charge retroactively to recover those expenses. Rather, it is simply designed to absorb the expected cost of new and future litigation now that the legal feed bag is back to full funding.
To be fair, attorneys should be entitled to a proper fee when their actions bring real benefits for their clients. Some attorneys in the pre-2003 reform days, however, clogged the system with ridiculous litigation, gaining pennies for their clients while reaping thousands of dollars in fees. Even Castellanos, while not a nuisance case, earned just $800 in benefits for the injured worker, while the attorney sought (and ultimately got) $38,000 in legal fees. The states response to that issue, to limit fees to a percentage of benefits gained for a client, drastically reduced litigation but also allowed abuse of lower end claims where the benefit level was not enough to gain an attorneys time or interest.
Somewhere in this mess there has to be a balanced solution. I still maintain the cheapest compensable claim is one approved quickly and managed properly, avoiding in many cases the need for an attorney altogether.
It could have been worse. Ratings icon NCCI originally recommended an almost 20% increase for the state. Our proud and noble Florida citizenry did what they always do when confronted with egregious news; they shot the messenger. After lawsuits, wrangling, teeth gnashing and assorted hissy fits, the state returned a decision to approve the much more palatable 14.5 % increase.
Which finally leads me to the reason for this post. I am sorry to say, but I am going to have to pass this expense along in the form of increased prices for this blog. Effective December 1st, the current subscription price of this blog, which is $0.00, will increase 20% to make up the shortfall. I know this will upset many, but I will point out that as rates fell 60% in this state over the last 13 years, I passed those savings on to you, my valued consumer. With each drop in rates, I applied a commensurate reduction to the $0.00 price tag.
Or I would have if I had actually been blogging that long. To some of you it just feels as though I have.
I really hate having to do this, but I am left with little choice. I am sure many will understand. After all, quality writing like this is never free, and I’ll continue to make sure it’s worth every stinking penny you spend on it.