A national insurance rating association has recommended that workers’ compensation rates paid by Florida businesses be reduced 8.4% in 2023, drawing applause from business groups whose members struggle with inflation and rising wages.
The National Council on Compensation Insurance (NCCI) filed the recommendation with the Florida Office of Insurance Regulation on Aug. 24. The suggested rate decrease on Florida businesses was twice as large as the decrease approved for this year.
“In these inflationary times, any reduced costs are very welcome to small business owners,” Bill Herrle, the National Association of Independent Business' Florida executive director, said in a prepared statement. “Inflation combined with a tight labor market makes this proposed workers’ comp rate reduction especially welcome.”
Insurance Commissioner David Altmaier should approve the rate cut to provide financial relief to the state’s small businesses, Herrle said.
The frequency of lost-time claims – that is, when injured workers receive wage-replacement benefits as a result of filing claims – has dropped over the past eight years, according to a summary of the NCCI filing provided to the Florida Record.
“The state’s average indemnity cost per case figures have been relatively consistent over time, while those for medical have been slightly more volatile from year to year,” the summary states.
The analysis also cites national trends as reasoning behind the recommendation for the proposed rate cut. Medical inflation in the workers’ comp industry has been moderate over the past 10 years, according to the report, averaging about 1.5% per year.
“NCCI’s most recent countrywide data shows that drug costs are declining, physician costs are up slightly and facility costs are rising in the workers compensation system,” the summary says.
Overall, underwriting profitability in the industry has been the norm for the past years, according to the national data.
“Medical inflation’s impact on workers' compensation losses is expected to be markedly lower than inflation for other goods and services,” the summary states. “The long-term trend of declining claim frequency is expected to continue. Overall, the workers' compensation system is faring well.”