Correction to Florida 12.1 Workers’ Compensation Rates Now in Effect

In my zeal in getting the Florida 2016.17 workers’ compensation rate “soap opera” to end, I suggested that the FL OIR appeal dealt with the conclusion for Florida workers’ compensation rates from 12.1.06 and beyond.  It has not.

Impact is the same, but outcome in flux in terms of if the 12.1.16 rates will be upheld or not upon the OIR appeal.  No current understanding of when this appeal happens or process thereof.

Thankfully, I have friends who are lawyers and lobbyists that do this for a living and understand the legal system whom have corrected me and thus wanted to pass on to you.

http://www.insurancejournal.com/news/southeast/2016/11/27/433200.htm

This is a detailed link that provides what I would consider some of the most salient points to consider as this journey towards finality continues:

“On the day before Thanksgiving, Leon County Circuit Court Judge Karen Gievers ruled that the rate increase negotiated between the National Council on Compensation Insurance (NCCI), which represents insurers, and the state regulators within the Office of Insurance Regulation (OIR), cannot go into effect and that NCCI must turn over documents requested by the plaintiff in the case.”

“The Sunshine Law challenge was brought by James Fee, a Miami attorney who represents injured workers. Fee claimed, and the judge agreed, that NCCI was in violation of the Sunshine Laws in holding “multiple, non-public, secret meetings” internally and with the OIR over the rates.”

…and then this story from Pensacola Business Journal that brings some clarity to the OIR appeal, but not much more then that…

http://www.pnj.com/story/money/business/2016/11/29/workers-comp-increase-back-effect/94629334/

“A 14.5 percent increase to state workers’ compensation rates will take effect Dec. 1 after the Florida Office of Insurance Regulation filed an appeal to a ruling that would have voided the rate hike.”

– Key words here are “would have voided” or I may have used may void if appeal is not won by OIR.  

“The increase occurs after the OIR filed a notice of appeal with the First District Court of Appeal Monday. It came in response to a court order from Circuit Judge Karen Gievers of Leon County Nov. 23 that voided the increase.”

–  So as I understand it then, the carriers are rolling out the 12/1 rate sets based on the OIR appeal holding the Gievers judgement in check.  The appeal itself allows this, but it has not been heard yet.  Not sure the length of this appeal process, whether NCCI will file a secondary 1/1 rate filing just in case, or most importantly, what this means over the next twelve months to the Florida workers compensation cost basis for PEO and overall business. 

I jumped the gun in yesterday’s post.  The impact of the appeal being filed is that, as of now, the rate increase scheduled for 12/1 is going into effect.  However, the matter is not finally determined, as the appeal is still pending.  Such an important fiscal event where the outcome is unknown for an unknown period of time.  As they say, NEWS at 11… And more as we understand where this goes next.

  • Paul R. Hughes

December 1 Florida Workers’ Compensation Rate Hike Back in Effect

A 14.5 percent increase to state workers’ compensation rates will take effect Dec. 1 after the Florida Office of Insurance Regulation (“OIR”) filed and won an appeal to a ruling that would have voided the rate hike.

The increase occurs after the OIR filed a notice of appeal with the First District Court of Appeal Monday. It came in response to a court order from Circuit Judge Karen Gievers of Leon County Nov. 23 that voided the increase.

The OIR originally disapproved a requested increase from the National Council on Compensation Insurance for 19.5%, but then approved a Florida rate set of a 14.5% increase.

What a ride!  A final rate approval 24 hours prior to the day the rates are to be implemented. Unless something crazier happens, we go back to the approved 12/1/16 rates for new and renewal business (not in force).  For those that are experience rated, regardless of policy expiration, the new rates will take effect at the policyholder NCCI Anniversary Rating Date.

  • Paul R. Hughes

Judge Halts Florida’s 14.5% Workers’ Compensation Hike Set For December 1st

Please see below from Insurance Journal.


A Florida circuit judge has blocked a 14.5 percent workers’ compensation rate increase due to go into effect Dec. 1 after finding that the insurers’ rating organization and state officials did not comply with the state’s Sunshine Laws and open meeting requirements in setting the new rate.

On the day before Thanksgiving, Leon County Circuit Court Judge Karen Gievers ruled that the rate increase negotiated between the National Council on Compensation Insurance (NCCI), which represents insurers, and the state regulators within the Office of Insurance Regulation (OIR), cannot go into effect and that NCCI must turn over documents requested by the plaintiff in the case.

The Sunshine Law challenge was brought by James Fee, a Miami attorney who represents injured workers. Fee claimed, and the judge agreed, that NCCI was in violation of the Sunshine Laws in holding “multiple, non-public, secret meetings” internally and with the OIR over the rates.

NCCI claims it has complied with applicable open meeting and other Sunshine Laws on transparency and says it will appeal the ruling.

“NCCI is very disappointed in the decision of the Leon County Circuit Court.  We continue to believe that NCCI and the Florida OIR have fully complied with the law.  NCCI plans to appeal the trial court’s decision,” NCCI said in a statement.

Amy Bogner, spokesperson for the OIR, said the agency is still reviewing the ruling to determine the next steps.

Rate History

OIR conducted a public hearing on Aug. 6 on a 19.6 percent rate filing by NCCI.

On September 27, OIR and new Insurance Commissioner David Altmaier disapproved the proposed 19.6 percent rate hike sought by NCCI. At the time, OIR told NCCI it would approve a 14.5 percent increase if NCCI refiled by Oct. 4. NCCI did and the official OIR approval came on Oct. 5.

However Judge Gievers found that prior to that Aug. 6 public hearing and then after it until refiling in October, NCCI conducted internal meetings and held discussions with OIR staff that were not open to the public and for which no minutes were kept. The judge said NCCI also withheld documents from the plaintiff, denying him the opportunity to fully participate in the Aug. 6 public meeting.

Gievers said NCCI “tried to delegate its way out of the Sunshine” by claiming to have assigned one actuary to handle the filing rather than a committee as cited in the Sunshine Laws but the judge said NCCI’s approach “clearly involves” committees.

NCCI’s rate filing was originally submitted in May of this year and then amended in June to address the impact of two Florida Supreme court case decisions (Castellanos v. Next Door Company and Westphal v. City of St. Petersburg) and legislatively-mandated updates to the Florida Workers’ Compensation Health Care Provider Reimbursement Manual. The Castellanos ruling invalidated the state’s mandatory attorney fee schedule, while Westphal ruling found the 104-week statutory limitation on temporary total disability benefits unconstitutional.

The rate increase was slated to become effective on Dec. 1 for new and renewal business, with no change in rates for current in-force policies.

Happy Thanksgiving

I am very thankful to have been a part of the PEO community for over twenty years.  Helping to create a way to better the experience of the American worker while creating efficiencies for the American employer… alongside with some of the best people I have ever met.  The passion behind our industry is unmatched.

Our PEO community interprets and aligns interests between workers and employers like no other.  I am very thankful that the rest of the world is finally catching on!  I am thankful for my friends in the industry as well as my internal “Libertatians” who help to execute on our vision every day.

I can’t wait to see our industry in twenty years.  It is the right model for American employment.

Until then, the Happiest of Thanksgivings and wishing you the very best over the holiday season!

Paul R. Hughes

Federal Judge Halts Overtime Rule

Please see below from ‘Society for Human Resource Management’


Just 10 days before the implementation date, a federal judge in Texas put the brakes on the Department of Labor’s (DOL’s) new federal overtime rule, which would have doubled the Fair Labor Standards Act’s (FLSA’s) salary threshold for exemption from overtime pay.

Twenty-one states filed an emergency motion for a preliminary injunction in October to halt the rule. They claimed that the DOL exceeded its authority by raising the salary threshold too high and by providing for automatic adjustments to the threshold every three years.


FLSA Overtime Rule ComplianceFor more overtime compliance news, tips and tools, check out the SHRM resources provided below:

· FLSA Overtime Rule Resources Guide
· Overtime Rule Blocked: Now What?
· Compliance Checklist · Infographic

The states’ case was consolidated last month with another lawsuit filed by the U.S. Chamber of Commerce and other business groups, which raised similar objections to the rule.

The overtime rule was scheduled to take effect Dec. 1 and would have raised the salary threshold from $23,660 to $47,476. The rule also provided for triennial adjustments based on the 40th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census region.

“A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity,” said Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas in a Nov. 22 ruling.

“This is a total surprise in many respects, but you have to tip your hat to the judge who made a tough call and hopefully a decision that will stay in place,” said Alfred Robinson Jr., an attorney with Ogletree Deakins in Washington, D.C., and a former acting administrator of the DOL’s Wage and Hour Division.

What’s Next?

For now, the overtime rule will not take effect as planned Dec. 1, but it could still be implemented later down the road. Employers may continue to follow the existing overtime regulations until a decision is reached.

[Read more: The Federal Overtime Rule Has Been Blocked. Now What?]

A preliminary injunction isn’t permanent, as it simply preserves the existing overtime rule—which was last updated in 2004—until the court has a chance to review the merits of the case objecting to the revisions to the regulation.

However, the revised regulation may face an uphill battle: The judge wouldn’t have granted the nationwide preliminary injunction unless, among other things, he thought the states showed a substantial likelihood of succeeding on their claims.

The purpose of the FLSA’s provisions under review in this case “was to exempt from overtime those engaged in executive, administrative and professional capacity duties,” Mazzant said. The salary level was purposefully set low to screen out the obviously nonexempt employees, he added.

Mazzant noted that the DOL “has admitted that it cannot create an evaluation ‘based on salary alone.’ ” However, “this significant increase to the salary level creates essentially a de facto salary-only test,” he said. “If Congress intended the salary requirement to supplant the duties test, then Congress—and not the department—should make that change.”

Robinson mentioned that the DOL will likely challenge the decision.

“We strongly disagree with the decision by the court, which has the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans,” the DOL said in a statement. “The department’s overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule. We are currently considering all of our legal options.”

HR’s Role

Many employers have already either raised exempt employees’ salaries to meet the new threshold or reclassified employees who are still earning less to nonexempt status.

[SHRM members-only toolkit: Calculating Overtime Pay in the United States]

Employers will likely want to leave decisions in place if they have already provided salary increases to employees in order to maintain their exempt status, Robinson said. It would be difficult to take that back.

If there are exempt employees who were going to be reclassified to nonexempt, but haven’t been reclassified yet, Robinson said employers may want to postpone those decisions and give the litigation a chance to play out.

“This should be a welcome sign for employers, even if they’ve already made changes,” he said. “They can at least hold off on further changes.”

Employers shouldn’t assume, however, that the overtime rule will be permanently barred. They should still have a plan to move forward if necessary in the future.

In the meantime, HR professionals will have to consider what to do now.

Was this article useful? SHRM offers thousands of tools, templates and other exclusive member benefits, including compliance updates, sample policies, HR expert advice, education discounts, a growing online member community and much more. Join/Renew Now and let SHRM help you work smarter. 

Medicine in America; A look at cost driving trends in healthcare

I recently came across the attached article, written in Money Magazine, that offers valuable insight as to what’s happening in America as it relates to the Pharmaceutical industry.  While it’s no secret that Big Pharma is a titanic in the healthcare industry, recent trends are certainly eye opening, and cause pause in regards to how we, as employers, co-employers, and consumers, are currently tackling the growing issue.  Perhaps more importantly is what we collectively are prepared to do moving forward.

James F Hughes

the-epidemic-of-rising-pharma-cost-in-america

 

California Change on who can be Excluded from Workers’ Compensation

 

“AB 2883 provides that all business workers’ comp insurance policies, including in-force policies, will be required to cover certain officers and directors of private corporations and working members of partnerships and limited liability companies that may have been previously excluded from coverage beginning on Jan. 1, 2017.Beginning January 1, 2017, in order for any of these individuals to be excluded from coverage the following requirements must be met:”

www.insurancejournal.com/news/west/2016/10/17/429540.html

Specifically, the exclusions for corporate officers have tightened… These are the new rules….

Not sure what this means to rate going forward as it opens the door to a class of potential claimant previously not understood in setting loss costs.  California comp not getting easier…

-Paul R Hughes

 

Per Forbes, 8.5 Times as Much Regulation per Employee now then in 1950

A fun statistic that speaks to the overregulation of American business and the value of the Professional Employer Organization (PEO) model.  The article from a special edition of Forbes on the 100 most innovative companies.

The Forbes article furthers the issue in espousing that while the economy has grown 700% since 1950, the regulation of business during this same time period has grown 1700%.

Good for PEO but not good for our economy.

-Paul R. Hughes