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Two 2016 Florida Supreme Court decisions continue to affect the state’s workers compensation system, but despite an uptick in indemnity benefits per claim, Florida’s comp system costs are in line with other states, according to a new study.
Cambridge, Massachusetts-based Workers Compensation Research Institute released its CompScope Benchmarks for Florida, 19th Edition study on Tuesday, which analyzed the current state of Florida’s workers comp system and compared it with 18 other states. The data reflects the effects of the 2016 Florida Supreme Court decisions in Castellanos, which held that a mandatory workers comp attorney fee schedule violated due process, and in Westphal, in which the court ruled that the state’s 104-week limitation on temporary total disability benefits was unconstitutional, according to WCRI.
The state’s total costs per workers comp claim has grown since 2013, with indemnity benefits per claim growing faster for claims between March 2017 and 2018; defense attorney payments also increased moderately during this period, according to the report. The cost driver for the increase in indemnity benefits was a jump in lump-sum settlement payments per claim, which may be due in part to the Castellanos and Westphal decisions, the report stated. The study found that Florida had an increase in lump-sum settlement from an average of around 3% per year for claims at 12 months maturity to nearly 10% annually after the state’s high court rulings, and on the whole reported more lump-sum settlements than most other states studied.
Florida’s workers comp system also saw growth in wages and the duration of total disability benefits following the Castellanos and Westphal rulings, with wages increasing 4% in 2016-2017 and total disability benefits increasing 3% to 4% in 2016-2017 and 2017-2018, according to the study.
However, the state’s average total cost per claim of $39,000 for more than seven days of lost time was typical of the study states, and despite its uptick in indemnity benefits per claim, the state remained slightly slower than the 18-state median.
Insurers and employers are awaiting a rehearing on whether Florida's limit on temporary workers compensation benefits is unconstitutional, arguing that an earlier ruling could raise the state's comp system costs by $65 million a year.