AIF Lobby Team Members Assigned to the Area of Workers Compensation: Nick Iarossi, Tamela Perdue, & Gerald Wester 

The workers’ compensation system is supposed to be a simple and effective mechanism for protecting injured workers without bankrupting their employers. Accordingly, AIF has always led the charge to create and maintain an effective, productive, and affordable workers’ compensation system in Florida.

The most recent workers’ compensation reforms of 2003 spearheaded by AIF’s Workers’ Compensation Coalition have resulted in remarkable savings for employers, decreased time away from work for employees, and improved enforcement of the laws governing the system.

However, some self-serving groups continually seek to harm and wreak havoc in the workers’ compensation market. Therefore, the Coalition has remained active to protect against changes that would undermine the reforms and compromise these remarkable savings.

The most notable is those efforts by the claimant attorneys to reverse the law and replace the statutory contingency fee schedule with hourly rates. Several cases have already been tried and appealed and the courts have ruled that the statute is proper. However, the Florida Supreme Court recently accepted jurisdiction of a case regarding the “reasonableness” of the statutory attorney fee schedule. AIF, along with other business and industry groups, has been granted status to file an amicus or “friend of the court” brief in the matter.

The Florida Supreme Court is scheduled to hear oral arguments in the case on April 8, 2008. The outcome of that decision will likely be the ultimate determinative case on this issue and will dictate whether the current successful system will be able to continue. Because the outcome of this case is unknown and because of the serious import the decision will hold, no one should attempt any changes to Chapter 440 at this time. The judiciary needs the opportunity to interpret this portion of the law and allow the market to respond to that decision before any additional statutory changes are contemplated. New legislation at this time is ill-advised since the pendulum could swing in either direction on this issue, and the state of the market will not be fully and finally appreciated until the decision is rendered.

For the 2008 Session, AIF will be addressing the following workers’ compensation issues.

Workers’ Comp Issues

• Oppose Attempts to “Sweep” the Workers’ Compensation Administrative Trust Fund (WCATF) -- Currently, the WCATF has a significant balance. The Governor has proposed sweeping some of those dollars for other general revenue needs. This is inappropriate since those dollars were placed there by taxes on employers’ workers’ compensation policies. If there are excess dollars in the fund, they should be returned to the payers -- Florida employers. CFO Alex Sink, in fact, has recently proposed returning some of those funds to employers; and AIF will join her in supporting this proposal before the Florida Legislature. Nevertheless, we can never support a raid on this trust fund

• Oppose any Efforts to Erode the 2003 Workers’ Compensation Reform Act -- Employer savings average more than 50% as a result of the passage of this legislation. We must protect against any changes which would jeopardize the savings that have resulted from the passage of this Act.

• Oppose Creation of a State Fund or Other State Risk Bearing Entity

• Continue to Support Increased Funding for State Fraud Investigations

• Oppose any Changes to Chapter 440 which could Impact Attorney Fee Challenges Currently Pending in the Florida Supreme Court -- As mentioned above, the Florida Supreme Court has accepted a case that challenges the constitutionality and validity of the attorney fee provision in current law; and AIF, along with other business and industry groups, has been granted status to file an amicus or “friend of the court” brief in the matter. If the Court strikes down that provision and the hourly rate fees are re-enacted, back to October 2003, the costs of existing litigated workers’ comp claims will immediately skyrocket. The exposure will certainly be tens of millions of dollars that has not been considered in the premium rates. This could mean that an extraordinary rate increase will occur as well as a potential retroactive assessment on all employers to cover such unforeseen increased costs.

• Oppose any Efforts to Statutorily Establish Procedures, Guidelines or Other Provisions that can Currently be Implemented by Administrative Action and for which Statutory Authority Already Exists -- Current law provides adequate express authority to the Division of Workers’ Compensation, and in some instances to the Agency for Health Care Administration, to properly administer Florida’s workers’ compensation system in the self-executing manner that the Legislature expressly intends it to operate. In recent years, the agencies have been involved with various rule challenges and other litigation concerning their implementation and administration of certain aspects of the system due to disputes over their adherence to proper rulemaking procedures as established in the Administrative Procedures Act. AIF supports strengthening the administrative rulemaking process and requiring agencies to follow established procedures for administration of the system with which they are tasked.