Two Florida Supreme Court decisions and a new law have prompted moves to raise workers' compensation rates in the Sunshine State by nearly 20% starting Oct. 1. And attorneys appear set to get most of the increase.

The National Council on Compensation Insurance filed the amended rate plan that would push up rates by 19.6%, the Florida Office of Insurance Regulation (OIR) announced July 1. According to Insurance Journal, 15% of the overall 19.6% gain stems from an April 28 Florida Supreme decision that declared unconstitutional the mandatory attorney fee schedule in workers' comp cases. Another 2.2% of the increase involves a second Supreme Court case that rejected the 104-week statutory limit in temporary total disability benefits in favor of a 260-week limit. The rest of the increase involved routine updates.

OIR will hold a public hearing on Aug. 16 regarding the proposed rate increase. Associated Industries in Florida, a business coalition, has held three town hall meetings regarding the rate hike. At the latest one, association president Tom Feeney called the planned hike a “calamity that is about to befall the business community,” reported.

Health News Florida reported similar concerns from Mark Wilson, president and CEO of the Florida Chamber of Commerce. “Small businesses create two of every three jobs in Florida, and a workers' comp rate increase as significant as this could force these businesses to choose between paying higher workers' comp rates and hiring new employees,” Wilson said in a press release.

Nevertheless, because of the court decisions there's general expectation in Tallahassee that the increase will go through.

Stephens & Associates, the lobbying firm for the Florida Building Material Association (FBMA), noted in an FBMA newsletter published today that Florida had the highest workers comp rates in the nation in 2000, but legislation passed since then cut rates by 60% and put Florida in 28th place this year in the state rankings of workers compensation rates.

"Limiting attorneys' fees in workers comp cases has been the single biggest factor in holding workers comp rates down in the past 13 years," the group wrote. "To illustrate an example of what the recent Florida Supreme Court decision means in costs, recently a plaintiff received $822.70 in a workers comp settlement and the attorneys received $37,520. The 20% increase in workers comp insurance rates expected in October equates to $1.18/$100 of payroll for pure loss costs, plus costs for administration and other expenses, up from 99 cents/$100 of payroll."