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Workers’ Compensation – Selected State Issues. Dan Sumner, Assistant Director Division of Workers’ Compensation Florida Department of Financial Services March 10, 2005 New Orleans, Louisiana. Florida Undergoes Major Changes In Workers’ Compensation System.
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Workers’ Compensation – Selected State Issues Dan Sumner, Assistant Director Division of Workers’ Compensation Florida Department of Financial Services March 10, 2005 New Orleans, Louisiana
Florida Undergoes Major Changes In Workers’ Compensation System • July 1, 2002: Department of Labor and Employment Security abolished. Division of Workers’ Compensation transferred to Department of Insurance. • January 1, 2003: Florida Department of Insurance part of new Department of Financial Services and Office of Insurance Regulation. • Division of Workers’ Compensation under DFS, headed by Chief Financial Officer. • SB 50-A – 2003 Workers’ Compensation Reform – Major Provisions Effective October 1, 2003.
Cost Drivers • Attorney Involvement • Permanent Total/Indemnity Benefits • Medical Costs
Changes to Attorney’s Fees • Eliminates provision that allowed for hourly fees; except for medical only cases. Maximum hourly fee is $1,500 @ $150 per hour. • Attorney retainer agreement cannot exceed statutory fees.
Changes to Attorney’s Fees • Attorney fees paid by the carrier will be calculated only on the amount secured above those specified in the offer to settle. 20% of first $5,000, 15% of next 5,000. 10% of remaining amount to be provided during first 10 years after claim filed, 5% of benefits secured after 10 years.
SB 50-A: Impact on Litigation • Petitions Filed, FY 2003/04 • 127,548 (-15.42%) • Unrepresented Claimants: • Pre- Post 10/01/03 10/01/03 2.96% 2.78%
Changes to Indemnity Benefits • Permanent Total • Eliminated Social Security eligibility standard. • Established higher threshold to meet PT eligibility: scheduled injury or not able to engage in at least sedentary employment within a 50 mile radius of employee’s residence, due to physical limitations.
Changes to Indemnity Benefits • PT benefits end at age 75; exception for not having worked enough to be eligible for Social Security. • PT supplemental benefits end at age 62; exception for not being eligible for Social Security. • Annual increase in PT supplemental benefits is reduced from 5% to 3%.
Changes to Indemnity Benefits • Permanent Impairment • Paid bi-weekly rather than weekly. • Increased from 50 percent to 75 percent of the temporary total disability benefit amount. • Reduced by 50 percent for each week in which the employee earned income equal to or in excess of the employee’s average weekly wage.
Changes to Indemnity Benefits • Permanent partial impairment benefits for psychiatric impairment are limited to one percentage point in the permanent impairment rating. • Compensation for Death • Maximum funeral benefits increase from $5,000 to $7,500. • Maximum death benefits increase from $100,000 to $150,000.
Changes to Indemnity Benefits • The duration of permanent impairment benefits is as follows: • Two weeks for each percentage point from 1 to 10 percent; • Three weeks for each percentage point of impairment from 11 to 15 percent;
Changes to Indemnity Benefits • Four weeks for each percentage point of impairment from 16 to 20 percent; • Six weeks for each percentage point of impairment from 21 percent or higher.
Changes to Medical Benefits • Increases maximum reimbursement for physicians to 110% of Medicare. • Increases maximum reimbursement for surgical procedures to 140% of Medicare. • Hospital payments are reduced, except for emergency procedures.
Changes to Medical Benefits • Increases maximum number of chiropractic treatments to 24 treatments within 12 weeks beyond initial chiropractic treatment. • IMEs are limited to one per accident, instead of one per specialty—cost borne by requesting party; if employee prevails, then carrier pays.
SB 50A: Employer Compliance • Out-of-state construction employer with employees engaged in Florida must have FLORIDA on Section 3A of the policy, and use Florida rates, rules and forms. • Division Can Issue Stop Work Order for: • Failing to secure coverage. • Material misclassification. • Material underreporting or concealment of payroll. • Failure to produce business records within 5 days of written request.
SB 50A: Employer Compliance • Definition of Independent Contractor 440.02(15)(c)3. “Employee” includes an independent contractor working or performing services in the construction industry.” • Exemptions – For Construction Industry: Corporate officers or members of a LLC owning at least 10% of stock or membership of business can elect exemption. Only 3 exemptions per business and affiliated businesses.
Electronic Reporting of Data • The Division is mandating electronic filing of the following reports: • Proof of Coverage, Medical Billing, First Report of Injury (Late ’05). • Centralized Performance System developed to monitor and measure performance electronically.
Electronic Reporting of Data • The Division is mandating electronic filing of the following reports: • Proof of Coverage, Medical Billing, First Report of Injury (Late ’05). • Centralized Performance System developed to monitor and measure performance electronically.
Proof of Coverage Database • On Division Website www.fldfs.com/wc • Platform for Policy Tracking System • Currently 3,531 registrants tracking 13,953 policies.