Newsletter: Legislative Report. Vol. 1. Issue 4
April 2003
In this issue
Update on Workers' Compensation in the Senate
On Tuesday, April 15, 2003, the Senate Committee on Banking and Insurance
handed the business community a blow on workers' compensation reform. The
Committee took up a "strike all amendment" that replaced all
previously filed bills. The committee considered 24 amendments drafted to the
"strike all amendment", five of which were not available until the
meeting was more than half way over.
What ultimately passed the Committee as CS/SB 1132, sponsored by Senators
Charles Clary (R-Destin) and Jeff Atwater (R-Palm Beach Gardens), diminished
some of the savings the original bill generated due to increases in most
categories of indemnity benefits and FairCare, a completely new system of
unknown cost for delivery of medical care to injured workers. Another major cost
item, the payment for the peer review panel, with the elimination of public
mediation, carrier Expense in handling a claim will significantly increase. This
exposure will retroactively be found in the rates. The -19% savings the bill
originally had is now down to only 9%. We tried to warn them!
The bill increases PTD benefits by extending benefits to age 75, rather than
the bill's original language which terminated PTD benefits at age 65. The bill
also increases an employee's potential eligibility for temporary total
disability benefits to 260 weeks and temporary partial disability benefits to
260 weeks, up from the current level of 104 weeks combined. Senator Clary stated
in this amendment would only increase costs 1.4%, and that the savings to offset
the cost would come in other areas. However, none of the other amendments that
passed were classified as cost savers. Instead, most of the amendments were cost
drivers. In particular, they passed an attorney's fee provision that does not
eliminate hourly rate attorney's fee, and will increase the current contingency
fee schedule to 20% of the first $10,000 and 15% of all benefits secured
thereafter. In addition, an hourly attorney's fee of $5,000 would apply to each
Petition for Benefits and $20,000 for compensability cases. The bill also
removed important provisions clarifying employer immunity from civil liability
necessary to correct the case of Turner v. P.C.R., Inc., which opened employers
to double liability through both workers' compensation and circuit court.
This bill does not generate the Senate's goal of 15% savings. Mary Ann
Stiles, General Counsel to Associated Industries of Florida, testified against
amendments that increased costs and did not eliminate hourly rate attorney's
fee, the largest cost driver in the system. However, her testimony, as well as
others in the Coalition of Business and Insurance Industry seemed to fall on
deaf ears. She did not get to speak to other important amendments or about the
bill as a whole.
All amendments were passed by voice votes, and not by roll call. On the
amendments, Chairman Posey and the bill's sponsors, Senator Clary and Senator
Atwater, were joined by Senator Lee, Senator J.D. Alexander (R- Winter Haven),
Senator Durrell Peaden (R-Crestview), Senator Paula Dockery (R-Lakeland),
Senator Alex Diaz de la Portilla (R-Miami), Senator Gwen Margolis (D-Miami
Beach), Senator Al Lawson (D-Tallahassee), and Senator Mandy Dawson (D-Ft.
Lauderdale), in voting in favor of CS/SB 1132 and against the business
community's interest in reducing workers' compensation premiums for Florida's
employers. On final passage only Senators Campbell and Wasserman-Schultz voted
against the Bill, but only because it did not go far enough and take more
savings out.
The bill will likely be heard on Tuesday, April 22, in the Senate Committee
on Appropriations. The workers' compensation issue will continue to be debated
through both the House and the Senate, and likely in a conference between the
chambers.
Please let your legislators know that the House Bill (CS/HB 1837) is a much
better way to achieve workers' compensation reform. It increases benefits to
injured workers while significantly reducing costs. In the end, CS/HB 1837 will
be better the entire business climate in the State of Florida.
George Sheldon
With two weeks to go in the regular session, only eleven (11) bills have
passed both houses of the legislature and been sent to the Governor for
signature. But that does not count the 96 ceremonial resolutions, honoring such
things as the Super Bowl Champion Bucs Day, "Take your Dad to School
Month" and "Polk County Legislative Day".
The House and Senate have yet to meet to talk about the $1.4 billion that
separates them on the annual budget. No resolution on the constitutionally
mandated smaller class sizes or the "no-smoking ban" in public places.
Miles still separate the houses on the issues involving medical malpractice and
workers' compensation. Yet, the Senate leaders contend this can all be resolved
in the remaining two weeks. But I wouldn't count on the legislature resolving
the issues soon.
The budget originally proposed by the Governor now finds itself out of
balance with revenue estimates that are already $400 million lower than
expected. The House's no-new-taxes budget is balanced through higher fees,
passing functions down to local governments for them to fund, and tapping $641
million from state trust funds designed for housing, environmental and
regulatory programs. While the Senate funds a $1.4 billion higher budget with
yet undisclosed higher taxes.
Senate President Jim King predicts that everything, from medical malpractice
to new House district lines, depend upon resolving the budget dilemma. If the
session is to end on time, someone needs to start talking to someone else.
Update on Workers' Compensation in the House
On Monday, April 14, 2003, the business community finally received some good
news about workers' compensation. The House Committee on State Administration
passed a Committee Substitute to House Bill 1837, which contains most of the
workers' compensation provisions supported by the Coalition of Business and
Insurance Industry.
Representative Don Brown (R-DeFuniak Springs) explained that this bill
"substantially enhances the injured workers' benefits without the expensive
costs of litigation."
The bill eliminates hourly rate attorney fees and reduces the current
contingency fee schedule to 18%-13%-8%-5%, down from the current fee schedule of
20%-15%-10%-5%. Additionally, HB1837 deletes the social security criteria from
the definition of catastrophic injury for purposes of determining permanent
total disability.
The bill also eliminates all exemptions in the construction industry except
for up to 3 corporate officers who each own at least 10% of the corporation.
Impairment income benefits to injured workers were increased to 75% of the
compensation rate, up from the current 50% level. Funeral expenses and death
benefits have also been increased by 50%.
The amendment to HB 1837, which placed these provisions into the bill that
passed, was sponsored by Chairman Connie Mack (R-Ft. Lauderdale), and
Representatives Don Brown, Dennis Ross (R-Tampa), and Kim Berfield (R-Tampa).
This bill results in an overall -12% rate reduction.
House Bill 1837 will likely be heard on the floor of the House of
Representatives next week. If you are interested in seeing meaningful reform on
this issue, please contact your Representatives and tell them to vote YES to CS/HB
1837 with no amendments.
There have been several incidents around the state where in which employers
have allowed their under-age employees to consume alcoholic beverages while
working or on the premises after hours. In Tallahassee and Jacksonville, such
incidents have resulted in fatalities.
One Senate bill, CS/CS/SB326, seeks to increase the penalties imposed on
employers when such behavior occurs. Current law states it is unlawful to sell,
give, serve, or permit to be served alcoholic beverages to a person under 21
years of age or to permit a person under 21 years of age to consume alcoholic
beverages on the premises. If convicted, the penalty is a second degree
misdemeanor, with imprisonment up to 60 days and a fine up to $500. A minor who
is convicted of alcohol possession is subject to the same penalties plus
revocation of his/her drivers' license. Persons under age 21, but over age 18,
may be permitted to serve alcohol in licensed establishments.
If passed, CS/CS/SB 326, by Senator Rod Smith (R-Gainesville) and the
Committees on Judiciary and Regulated Industries, would increase the penalties
to the establishments, or its agents, officers, servants, or employees, to a
first degree misdemeanor, punishable by up ton one year imprisonment and up to a
$1,000 fine.
In addition, this bill would change the quota license process which governs
the sale of alcoholic beverages throughout the state. Currently, the law allows
for one license for every 5,000 residents in a county. Such licenses are awarded
in an annual double-random drawing, based on a ranking system. This bill would
change the way such licenses are awarded making all beverage quota licenses
revoked after July 1, 2003, to be available for the statutory public drawing.
This bill passed the Senate Committee on Judiciary this week and was placed
on the Senate calendar. There is a similar measure in the House, HB 367 which
has been referred to the Committees on Criminal Justice, Public Safety &
Crime Prevention, and Business Regulation. However, none of the House Committees
have yet heard the bill.
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