Senator Nelson Fundraiser Held On Campus at Libertate Insurance

One of the best things about working out of a non-traditional office is the opportunity to house really cool events.  The recent NAPEO fundraiser for Senator Nelson did not disappoint!

On Friday, April 20th, Libertate was fortunate enough to participate in this fabulous event that raised money for Senator Nelson who has been a long-time supporter of PEO initiatives such as the Small Business Efficiency Act (SBEA).  Additionally, he helped educate his fellow legislators on how to address PEOs and the Affordable Care Act (ACA).  Thanks to Senator Nelson, NAPEO and to all of those that participated.

All Hands on Deck in Tallahassee

From our friends at the Florida Association of Professional Employer Organizations (“FAPEO”).    It could not be said in a more powerful manner the need to continue advocacy for the PEO industry as we continue to grow and be an even more powerful piece of supporting workers’ compensation for the employees of the State of Florida.  I look forward to seeing you there — This will take place on Feb 19-20 2018.

 

 

From: Robert Skrob
Sent: Thursday, January 18, 2018 9:35 AM
Subject: Lies and Insults in the Lawmaking Process

 

You’ve had a string of successful years in the PEO industry. Market share has increased and payrolls grown.

 

This makes our enemies angry.

 

Some people outside of the PEO industry are on the losing side of your growth. When you sign-up a new client that has never worked with a PEO before, that means they are canceling other relationships.

 

Rather than make their offering more competitive, many of those canceled provider complain to lawmakers. They accuse your company of cheating the system, fraud, and failing to pay for injuries. Sure, in the process they do everything they accuse you of, but the reality is lawmakers don’t know that.

 

Lawmakers hear a lot of negative misinformation from people outside the PEO industry.

 

That’s why it’s important for you to tell the other side of the story. To explain to your lawmakers exactly how you help worksite employees get better benefits, help your clients focus on growing their business and how you help government improve compliance and collect more taxes.

 

On February 13-14, we’ll host the Florida PEO CEO Legislative Summit. This event is free, I attached a brochure with more details.  Just RSVP so we can save you a seat.  http://www.fapeo.org/wp-content/uploads/2016/12/2017-PEO-Legislative-Summit.pdf

Here is the hotel information:

There is block of rooms at the Doubletree Hotel located at 101 S. Adams Street in Tallahassee, FL. FAPEO has arranged a special rate of $169.00 per night for this event. You can make your reservation for the night of February 13th using this link: http://bit.ly/2CGrkwo or by calling 1-877-800-2652 and mention that you are with FAPEO.

This event will give you insights into workers’ compensation reform efforts, insider information on how the reshuffle created by lawmakers moving into the Trump administration will impact the lawmaking process and a time to weigh in on issues impacting the PEO industry.

 

Plus, we’ll use the opportunity of having you in Tallahassee to set up meetings for you with your local lawmakers to educate them on how the decisions they make impact your PEO and the clients and co-employees you serve.

 

Our lawmakers will make decisions on hundreds of issues over the next few weeks. Few lawmakers understand what you do and yet they hear a lot of nonsense from those who want to make your PEO less competitive. While we work hard to educate each lawmaker about the PEO industry, there’s nothing as powerful as hearing directly from a company within his or her community.

 

A briefing from you about your company is a lot more powerful than David Daniel or I giving legislators a presentation about the PEO industry in theory.

 

Make your plans now for February 19-20. I attached a brochure with additional details.  Just send Suzanne or me an email to RSVP.

 

 

Approved WC Legal Fees up 36 percent in 16-17, what will the 17-18 fiscal year look like?

Injured workers racked up nearly $186 million in approved legal fees in 2016-2017, a 36 percent increase from the previous year, a state report on the workers’ compensation insurance system shows.  This is with the Castellanos v. Next Door Company ruling, which repealed restrictive attorney fees caps, only being in place for 7 out of 12 month in the 16 -17 fiscal year.

In all, attorneys’ fees in the workers compensation system totaled nearly $440 million during the 2016-2017 fiscal year. The majority — nearly $254 million — were forked out by employers defending workers’ compensation claims.

Issued by the Office of the Judges of Compensation Claims, the 2016-2017 annual report notes that $185.6 million in approved legal fees for injured workers is the highest amount paid in nearly a decade and is attributable to a 2016 Florida Supreme Court ruling.

“Clearly, there is a trend suggested of increasing claimant attorneys’ fees in the wake of (the ruling),” the report, released last month, notes.

The report shows that in 2016-2017, more than $75 million in hourly fees were approved for claimants’ attorneys, a nearly 200 percent increase from the $25.8 million in hourly fees that were approved the previous year.

During the same period, the report shows that fees paid to workers’ compensation attorneys under legislatively approved fee caps decreased about 31 percent.

It is the second consecutive year that legal fees increased for injured workers and employers and reverses what had been a five-year trend of lower legal costs for both sides in workers’ compensation cases.

Workers’ compensation is a no-fault system meant to protect workers and employers. It is supposed to provide workers who are injured on the job access to medical benefits they need to be made whole. Those who are injured for at least eight days also are entitled to indemnity benefits, or lost wages. In exchange for providing those benefits, employers generally cannot be sued in court for causing injuries.

While the system is supposed to be self-executing, injured workers hire attorneys when there are disputes over the amounts of benefits they should receive.

Florida businesses faced some of the highest workers’ compensation costs in the country in the early 2000s. Business interests argued that attorney involvement — legal fees in the aggregate totaled $427 million in fiscal year 2002-2003 — was the reason for the high costs.

The Legislature responded by passing a sweeping rewrite of the workers’ compensation system in 2003 that, among other things, tied the recovery of plaintiff attorneys’ fees to percentages of the amount of recovered benefits. The law was tweaked in 2009 to make clear that workers’ compensation judges were precluded from awarding additional hourly fees for plaintiffs’ attorneys.

But in a 2016 ruling known as Castellanos v. Next Door Company, the Florida Supreme Court ruled that the restrictive fee caps violated injured workers’ due process rights and authorized judges to award fees outside the fee schedule if adhering to it yielded unreasonable results.

Business interests lobbied the Legislature earlier this year to, at a minimum, limit the hourly rates that attorneys could charge. But lawmakers did not approve a change.

Despite the marked increase in legal costs for 2016-2017, the report notes that when adjusted for inflation, aggregate attorneys’ fees in Florida workers’ compensation have decreased by more than $100 million over the past 14 years.

Source: https://www.news4jax.com/news/florida/legal-fees-increase-in-workers-comp-system

Florida’s Workers’ Comp Rate Decrease By Industry

FORT MYERS, Fla., Nov. 27, 2017 /PRNewswire/ — What goes up must come down is a fundamental law of gravity and roller coasters.  But it is also starting to become an appropriate depiction for Florida workers’ compensation rates, according to Mark Webb, senior vice president of Lykes Insurance.

“In what is heralded as good news for employers, the Florida Insurance Commissioner approved an amended filing on Nov. 9, 2017 ordering an average decrease of 9.5 percent in workers’ compensation rates effective Jan.1, 2018,” says Webb. “This decrease was slightly more than the 9.3 percent decrease proposed by the NCCI in August.”

Webb notes that this is an average decrease. The actual decrease is allocated among classifications by industry as follows:

Office and Clerical -11.5 percent
Goods and Services -10.6 percent
Manufacturing -10.3 percent
Contracting -7.19 percent
Miscellaneous -8.3 percent

This decrease was filed based on a reduction in claim frequency over the two years prior to 2016.  However, it does not take into consideration the two Supreme Court decisions in 2016 that brought the 14.5 percent increase last December: the Castellanos and Westphal decisions.

These two cases resulted in retroactive changes to claimant attorney compensation and impairment benefits.  Few deny that these court decisions are and will continue bringing upward pressure on the cost of claims, and it seems unlikely that the Florida legislature will take any action on reforms to address this issue, especially in the wake of a rate decrease.  According to Logan McFaddin, Southeast Director for the Property Casualty Insurers Association of America, “Experience data relating to the impact of Castellanos and Westphal continues to mature and will likely be reflected in future rate filings.”

This sentiment was reflected in the order from the Insurance Commissioner that directed the NCCI in future recommended rate filings to provide a detailed analysis of the impact of Castellanos, including reopening of older claims, changes in reserves and settlement rates, changes in claim frequency and severity, increasing attorney involvement, and fees paid to attorneys.

One issue that needs to be acknowledged is the possibility of a mid-term cancellation and re-write of a workers’ compensation policy to take advantage of the new rates. While it is uncertain how willing insurance carriers will be to embrace this action, this should be evaluated on a case by case basis, because there are some reasons for concern over this strategy.

First, a mid-term change will eliminate any potential dividends that may be earned on a policy. Also, carriers may choose to apply a short rate cancellation penalty if a policy is cancelled and moved to another carrier. The short rate penalty is approximately 10 percent of the unearned premium, which, if applied, would completely negate any advantage of the 9.5 percent rate decrease. Finally, if rates do go back up next year, the policyholder would be moving up the date that the policy would be impacted by the higher rates.

“The bottom line is, as usual, uncertainty prevails,” Webb concludes. “With the uncertainty surrounding the market impact and future rates, it is important to not allow a rate decrease to bring complacency to the significance of safety and claims management in your workers’ compensation program.  We strongly suggest working with your advisors and advocates to help you prepare for whatever the future may hold for workers’ compensation.”

Source: http://markets.businessinsider.com/news/stocks/Dealing-with-the-Workers-Compensation-Roller-Coaster-1009678544

Florida Orders Workers’ Comp Rate Decrease of 9.8%

Florida Insurance Commissioner David Altmaier has ordered a statewide overall workers’ compensation rate decrease of 9.8 percent, a slightly higher decrease than the 9.6 percent decrease filed by the National Council on Compensation Insurance (NCCI) back in August.

Altmaier’s order disapproving NCCI’s 2018 rate filing was issued by the Florida Office of Insurance Regulation on Tuesday, and stated NCCI’s rate request be amended and refiled by Nov. 7, 2017.

Altmaier’s order cited NCCI’s 2 percent allowance for profit and contingencies in its rate filing as the reason for rates being disapproved. The order states that the refiling should contain a profit and contingencies provision no greater than 1.85 percent.

The rate decrease will come as a welcome surprise for many Florida businesses that were expecting additional rate increases after the Florida Supreme Court issued two decisions – Castellanos v. Next Door Company and Westphal v. City of St. Petersburg, – in 2016 that sent rates up by double digits this year.

“Using new data, this experience based filing proposes a decrease in rate level based on data from policy years 2014 and 2015 valued as of year-end 2016,” the order states. “While some of the experience used as the basis for this filing occurred before the recent Florida Supreme Court decisions, a portion of the experience period includes claims that occurred after the decisions.”

At a rate hearing in mid-October, NCCI said a decline in claims frequency due, in part, to safer workplaces, enhanced efficiencies in the workplace, increased use of automation, and innovative technologies were partly behind the recommended decrease. NCCI said this trend is not unique to Florida but countrywide, and is expected to continue in the future.

According to OIR’s order, from 2011 to 2015, the cumulative decreases in the indemnity and medical loss ratios were 19.9 percent and 12.3 percent, respectively. The primary reason for the declining loss ratios is a significant reduction in the lost-time claim frequency which declined by 45 percent from 2001 to 2015 with over 8 percent of the decline occurring in 2014 and 2015.

“Even after considering the impact of the Castellanos and Westphal decisions, other factors at work in the marketplace combined to contribute to the indicated decrease, which included reduced assessments, increases in investment income, decline in claim frequency, and lower loss adjustment expenses,” the order states.

However, the order also mandates that NCCI provide detailed analysis of the effects of the Castellanos decision by the Florida Supreme Court in future filings, which accounted for 10.1 percent of the 14.5 percent increase in Florida workers’ compensation rates this year.

“To ensure workers’ compensation rates are not excessive, inadequate or unfairly discriminatory … it is imperative that additional quantitative analysis be conducted to determine the effect the Castellanos decision is having on the Florida workers’ compensation market and the data used to support future rate filings,” the order states. “The analysis may include alternative data sources and should examine changes to the Florida workers’ compensation market that are attributed to or observed as a result of the recent court decision.”

Approval of a revised rate decrease is contingent on the amended filing being submitted with changes as stipulated within the order. If approved by OIR, the revised rate decrease would become effective on Jan. 1, 2018 for new and renewal business.

Read Order: Florida OIR Workers’ Compensation Insurance Rate Decrease

By Amy O’Connor of InsuranceJournal.com | November 2, 2017

NAPEO Forms Cybersecurity Task Force

As an fyi, NAPEO has formed  a Cybersecurity Task Force to better understand the exposures of PEO and how to mitigate them.  A very timely and critical task force that I am very proud to be a part of – This is by far the most misunderstood exposure to PEO today.

“NAPEO recognizes the critical business and compliance risks faced by our members concerning cybersecurity. Although many member resources such as PEO Insider and various conferences have featured helpful information and programs for members on this topic, NAPEO recognized more is needed and formed the NAPEO Cybersecurity Task Force to help fill that gap. The Cybersecurity Task Force is comprised of a cross section of professionals with expertise in insurance, law, technology and the business environment of PEOs. Its primary mission is develop a set of best practices which NAPEO members could use to strengthen their compliance efforts and minimize their legal and business risks. The Task Force’s first step will be to survey members to gain a deeper insight into the cybersecurity concerns and exposures of members, which will be used to help shape the best practices the task force will produce. For more information, please contact Farrah Fielder.”

Florida WC Rate Decrease Hearing Set for Tomorrow

The Florida Office of Insurance Regulation will be discussing on the 18th of October NCCI’s proposed rate decrease of 9.6%.  Agenda shown below.  If you have any comments that you would like the state to hear, you can email ratehearings@floir.com with the subject line of your e-mail should read “NCCI” up until the 25th of October.

PUBLIC HEARING AGENDA
NATIONAL COUNCIL ON COMPENSATION INSURANCE
WHEN: October 18, 2017, 1:00 p.m.
WHERE: 412 Knott Building
404 South Monroe Street
Florida Capitol Complex
Tallahassee, FL 32399
GENERAL SUBJECT MATTER TO BE CONSIDERED: National Council on Compensation Insurance (NCCI) has
proposed an overall average decrease in rate levels of 9.3% for the voluntary market for all new and renewal workers’
compensation insurance policies written in the State of Florida, effective January 1, 2018. The filing also requests a
decrease to the fixed expense cost applicable to every workers’ compensation policy in Florida from $200 to $160 which
when combined with the rate level decrease results in an overall average workers’ compensation premium decrease of
9.6%.
1. Opening Remarks Office of Insurance Regulation (Office)
a) Introduction of Office personnel
b) Introduction of participating parties
2. Presentation National Council on Compensation Insurance
3. Public Comment Open to the Public
4. Closing Remarks
5. Adjourn
Any comments or concerns not addressed at the public hearing may be forwarded to ratehearings@floir.com; the subject
line of your e-mail should read “NCCI”. The record will be open for public comment until October 25, 2017.

U.S. DHS M-274 Handbook NAPEO Update

Compass Readers,

Quickly after Michael Miller’s memo went out yesterday about the M-274 handbook, Farrah Fielder (General Counsel, NAPEO) sent out an email with NAPEO’s updates and plan for tackling this head on.

Farrah expressed the following points on the M-274 change and NAPEO’s federal governmental affairs plan:

  • NAPEO has been aware of this change since February, when several NAPEO members mentioned to NAPEO that the PEO content had been removed from the M-274 handbook.
  • Contact with ICE by NAPEO member companies at that time yielded no information on the changes.
  • There was no political leadership at ICE when these changes occurred.
  • NAPEO has seen no changes in enforcement from ICE towards the PEO industry since the Trump Administration took office.
  • No NAPEO member, to our knowledge, has changed its policies on the I-9 form based on the removal of the PEO content from the M-274 handbook.
  • And, as far as we are aware, ICE has not rejected/refused/prohibited PEOs from filing I-9s on behalf of clients or filing client I-9s as agents since the changes to the M-274 handbook.

Farrah continued, “NAPEO, as part of its federal legislative and regulatory agenda, has immigration reform as an agenda item.”

The following is the associations plan of action:

  • Ask the Immigration and Customs Enforcement agency to clarify the responsibilities of a PEO under E-Verify, addressing the following issues:
    • PEO and client compliance responsibilities under E-Verify
    • Compliance with E-Verify for individuals and clients that are already in a PEO relationship
    • Creating an E-Verify compliance safe harbor for PEOs
  • NAPEO also plans to form a working group to implement these items once there is political leadership at ICE.

To understand more on this topic, please refer to this previous article that was published yesterday: https://peocompass.com/u-s-department-homeland-security-m-274-handbook/

If you have any questions feel free to contact Farrah Fielder (ffielder@napeo.org) or Thom Stohler (tstohler@napeo.org – VP, Federal Government Affairs NAPEO) directly.

We will continue to update as more information comes in.

Regards,

Brian Urso
Risk Consultant
burso@libertateins.com
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