Sink: Fla. Workers' Comp Rates to be Cut in Half Next Year

July 10, 2007

While Florida business owners may still be struggling with high property insurance costs, another major business expense will go down next year: workers' compensation assessment rates are set to be cut in half.

Florida Chief Financial Officer Alex Sink this week ordered a 50 percent cut in the Workers' Compensation Administration Trust Fund assessment rate. The assessment is paid by workers' comp insurers into a state fund.

The rate will drop to 0.25 percent next year from 0.50 percent, and has dropped from 2.56 percent five years ago.

The rate cut could result in nearly $20 million in savings that can be passed on to Florida employers as lower premiums for workers' comp insurance, Sink said. She credited the economy, and efforts to cut down on workers' compensation fraud in making the fund healthy enough to slash rates again.

Also, employers who do not comply with workers' comp laws now pay much more in fines than they did a few years ago, which has boosted the fund.

Insurance companies pay into the fund to pay for the state office that administers and enforces workers' compensation programs.

Since 2003, workers' compensation rates charged by insurers have dropped about 40 percent cumulatively. Industry and regulatory officials say that since a state law changed in 2003, the frequency of injured workers' claims has decreased, mainly because of less fraud and abuse.