Tom Gallagher, Florida’s chief financial officer, this week called for greater savings for Florida’s small businesses based on an independent review of proposed workers’ compensation rates for the state.
Gallagher said that the proposed decrease of 7.2 percent in workers’ comp rates by the National Council on Compensation Insurance (NCCI) should be a 22 percent cut. The rate cut would boost estimated savings for Florida employers from $237 million to $726 million.
“We fought for and passed meaningful reforms to the state’s workers’ compensation system in 2003 and, as a result, we are seeing dramatic savings for our small businesses,” said Gallagher. “When we lower costs for Florida employers, we boost job creation and opportunity for Florida’s working families. Our independent review reveals that greater savings should be realized by Florida employers.”
Gallagher’s call is based on an independent rate review by the consumer advocate’s office. The review confirmed that rates proposed by NCCI did not adequately account for projected losses, earnings and medical costs for workers’ comp insurance companies. The rates will be the subject of a public hearing Friday, Oct. 7, before Insurance Commissioner Kevin McCarty. McCarty must rule on rates that would become effective Jan. 1, 2006. Gallagher said that Consumer Advocate Steve Burgess will testify at the rate hearing.
Gallagher spearheaded the passage of Senate Bill 50A in 2003 that reformed the state’s workers’ comp system, including tougher penalties for workers’ comp fraud and premium evasion.
This year’s proposed decrease would be the third consecutive drop in rates since the bill’s passage. Rates have already dropped by 19 percent in the first two years following the reforms.