Florida small businesses seeing their second workers’ compensation rate increase in as many years are calling on the state to reduce the increase because they fear it will harm the economy.
A small business group is asking that the increase be reduced by $62 million — an amount equal to the extra costs to the system of physician-dispensed drugs.
Florida Insurance Commissioner Kevin McCarty last October approved an 8.9 percent rate increase, which took effect on Jan. 1. It followed a 7.8 percent increase implemented last year. But even with this year’s increase, the state’s rates have fallen by a total of 58.6 percent since 2003.
For the small business community, however, two increases are two too many. Bill Herrle, of the National Federation of Insurance Business-Florida Chapter, said that the increases are going to further hurt an already struggling economy.
“We lost 42 percent of our construction jobs since the downturn and the state’s unemployment rate is hovering around 11 percent,” said Herrle. “The increase may be justifiable in actuarial terms, but there is no doubt that it’s going to dampen the demand for labor in a state where the labor market is already badly depressed.”
Herrle called on McCarty to reduce the increase by 2.5 percent based on the inflated cost of physician-repackaged and dispensed drugs. The industry’s rating organization, the National Council on Compensation Insurance, said that of the 8.9 percent rate increase, 2.5 percent, or $62 million, is due to repackaged drugs.
The state Division of Risk Management, which oversees the state’s workers’ compensation program, estimates that repackaged drugs add $1.2 million to the state’s cost.
McCarty has said he is “very concerned” about the increased costs associated with physician-dispensed drugs and urged the legislature to act.
Both the House and Senate are considering legislation.
“Workers’ compensation premiums reflect the cost of treating injured workers and right now that cost is inflated by distortions in the pharmaceutical market,” said Herrle. “No legislature in Tallahassee can say that they are focused on job creation and not be ready to address this issue at their earliest opportunity.”
Was this article valuable?
Here are more articles you may enjoy.
Two Montgomery Workers Charged with Insurance Fraud in Alabama 
Insurers Get Green Light to Pay Less Than Billed Charges in Florida PIP Cases 
Insurer Chubb Readies $350M Payout Tied to Baltimore Bridge Collapse 
The Future Is Near for Self-Driving Trucks on US Roads From This Issue
