Business

NCCI Workers' Comp Hike 'Bad News' for Small Businesses in Florida

By: Jim Turner | Posted: October 25, 2011 3:55 AM
The National Federation of Independent Business says a pending 8.9 percent rate hike in workers' compensation costs is “bad news” for small businesses.

The federation noted that small businesses had to cover a 7.8 percent increase last year and leadership expressed a desire for legislators to again try capping the price doctors can charge when dispensing drugs directly from their medical offices.

“The increase may be justifiable in actuarial terms, but there’s no doubt that it’s going to dampen the demand for labor in a state where the labor market is already badly depressed,” Bill Herrle, Florida director of the federation, stated in a release.

On Monday, the Office of Insurance Regulation announced that Florida Insurance Commissioner Kevin McCarty plans to approve the requested rate increase for the Boca Raton-based National Council on Compensation Insurance, which manages workers' compensation insurance industry information.

McCarty added that even with the rate increase, Florida maintains the lowest workers’ compensation insurance rates in the Southeast.

NCCI stated in its filing with the state that insurers have seen an increase in claims for the past two years. NCCI also noted that since 2003, rates had been cut by a cumulative 64.7 percent.

The hike approved Monday goes into effect Jan. 1.

The state insurance office did note that NCCI’s entire request was not approved. Workers' compensation costs vary depending on the industry, and rate increases for areas such as roofers and emergency medical service were not approved.

In announcing his approval, McCarty also expressed concerns about potentially higher compensation costs associated with allowing doctors' offices to dispense medications instead of requiring a patient to go to a pharmacy.

“I am also very concerned about the evidence presented in the filing and during the rate hearing about the increased costs associated with physician-dispensed repackaged drugs,” McCarty stated in a release. “This practice has become a critical cost driver in the workers’ compensation insurance marketplace. It is imperative that the Florida Legislature address this issue during the upcoming legislative session.”

A cap was approved as part of a larger bill by legislators in 2010. But with opposition expressed by medical groups including the Florida Medical Association and the American Federation of State, County and Municipal Employees mostly on convenience grounds, former Gov. Charlie Crist enacted a line-item veto on the cap.

As of Monday, no bill has been filed for the 2012 session that would cap the costs.

Herrle expressed hoped that legislators would once again cap how much physicians can charge when dispensing drugs.

“Workers' compensation premiums reflect the cost of treating injured workers. Right now, that cost is inflated by distortions in the pharmaceutical market,” Herrle stated. “No legislator in Tallahassee can say that they are focused on job creation and not be ready to address this issue at their earliest opportunity.

“The price that doctors can charge is many times higher than the prices that pharmacies can charge for the very same prescriptions. The disparity has distorted the market in Florida and small businesses are bearing the brunt of it with higher premiums.”

Reach Jim Turner at jturner@sunshinestatenews.com or at (850) 727-0859 or (772) 215-9889.

 

 

 

 


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