Workers’ Compensation Alternative Proposed in Florida
Last week, a House Bill 1069 was introduced in the Florida House by Tom Fabricio – Miami Lakes to create an alternative to the workers’ compensation system in Florida.
The Bill in its entirity can be viewed at the below link:
https://www.flsenate.gov/Session/Bill/2025/1069/BillText/Filed/PDF
The foundation of the bill is that an employer could either continue to buy workers’ compensation or become a “Qualified Compensation Alternative Employer (QCARE)” and essentially “opt out”. These QCARE employers would have full direction of medical, be allowed to adjudicate their own claims. While workers’ compensation is mandatory and provides “exclusive remedy” to a claimant without any economic limitation, this alternate arrangement would only require an employer to purchase $1m in “Benefit and Negligence Liability” coverage and limit payouts to $300k per claimant. Assumedly, they mean Occupational Accident and Health coverage, but not how worded. It also should be noted that the maximum payout for medical and indemnity stops at 156 weeks or three years. What is interesting is the detail spent in defining an independent contractor with 8 of the 19 pages of the bill discussing such. The retentions allowed for each employer is based on the QCARE employer’s size. For someone with a net worth (not defined) of <$10m, an insurance policy that has a self-insured retention of the greater of $50k or 1.5% of net worth per occurrence.
While Texas has allowed “non-subscription” to workers’ compensation, they and a few other states are the exception versus the rule. In Florida, rates have plummeted 78% since 2003 with the last eight years being rate decreases. One would think that retooling a statutory line of insurance like workers’ compensation would happen when rates were going the other way or inherent problems in the system existed. Neither is the case in Florida nor see any data in this bill that would suggest there is any issue to be addressed. It should be noted that almost 10% of loss dollars in the workers’ compensation system are paid on claims in excess of $1m according to the National Council on Compensation Insurance (NCCI).
While intriguing and creative, lack of rationale behind such a marked shift in taking care of injured workers makes no sense to me.
Author: Paul Hughes
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