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ASSOCIATED INDUSTRIES OF FLORIDA DISAPPOINTED WITH SO-CALLED "WORKERS’ COMPENSATION REFORM"

April 4, 2001

TALLAHASSEE – Today, Associated Industries of Florida (AIF) was disappointed with the uneven work of the House Insurance Committee in its consideration of its workers’ compensation reform bill, PCB 01-04. After dozens of hours of public testimony, hundreds of hours of exhaustive hearings by the Workers’ Compensation Task Force, the results of which were reported to the House Insurance Committee in great detail, and countless personal briefings, the committee failed to produce a bill that fundamentally reforms a sinking workers’ compensation system. Worse yet, in attempting to compromise on every issue, the committee somehow managed to produce a bill that will only further increase costs to Florida’s employers and accelerate the system’s collapse into fiscal disarray.

"We are amazed," said Jon L. Shebel," AIF’s president & CEO. "The committee came within a hair’s breadth of actually increasing attorneys’ fees, liberalized permanent total disability even further and totally ducked the issue of fraud."

"If the bill continues as it was written today by the committee, it may be too expensive for the business community to support it," said Mary Ann Stiles, AIF General Counsel and lead advocate for AIF on the issue. "This is really tragic. Workers’ compensation was designed for employers and employees and everyone else involved simply makes money off this system. Right now, while this bill increases benefits to injured workers, it does not create enough system balances to counter a rate increase," continued Ms. Stiles.

The House Committee on Insurance, chaired by Rep. Leslie Waters (R-Largo), actually adopted an amendment by a voice vote scuttling language in the bill to reduce attorney’s fees, which are an enormous cost-driver to the system under current law. However, on a roll call vote, the committee edged back and the amendment failed. The committee also adopted an amendment further liberalizing the law, which will permit more injured workers to achieve the "permanent total disability" designation. Adopting this amendment was totally at cross-purposes with the original intent of the draft bill and the report of the Workers’ Compensation Task Force recommendations. 

Florida is already second only to Colorado in the percentage it pays in indemnity benefits for permanent total disability. In addition, the committee cast aside a compromise AIF had offered on closing the exemptions from required coverage currently enjoyed by the construction industry. Instead, the committee opted for yet another study of the issue. This much-studied "issue" is draining an estimated $1 billion in premium dollars out of the workers’ compensation system due to egregious and aggressive fraud. Finally, the committee lamely agreed to a compromise that combines private and public mediation on workers’ compensation cases, further increasing costs to Florida’s employers.

"We can only educate the legislators so much," said Shebel. "At some time, they will have to make the hard decisions. They can do it now and make good policy, or they can wait until we have yet another full-blown workers’ compensation crisis."

"When major issues are addressed, decisions must be made," said Shebel.

"Chairman Waters’ desire to compromise every issue prior to its consideration by the committee only weakens the overall efforts for reform. The rhetoric being tossed around by opponents of reform should be recognized for what it is."