Florida Decision Could Cause Crisis
The recent Florida decision makes all reserves possibly inadequate. The Florida Workers Comp Claim that was mentioned earlier this week shows how little the upper courts understand the intricacies of certain Workers Comp claim systems. There had been published cases by Supreme Court Justices that said they were enacting “social legislation.”
If the Supreme/Appeals Court justices could step back and see what this will cause in the near future, I am not sure they would make the same rulings. As in Florida, many states have had upper court decisions made that severely impacted the underpinnings of the respective WC systems.
In Florida, are now all claims with Temporary Total Disability benefits now going to be reserved at more than 104 weeks? Is that really fair from one decision? Were proper past rates of premium paid with this decision now possibly causing the TTD limits to be raised from 104 weeks?
A great example of this actually occurred in North Carolina in 1994. A North Carolina Supreme Court decision involving medical benefits caused a temporary Workers Comp policy and coverage crisis. The decision said that all medical benefits for Workers Comp since 1938 could be reopened for medical benefits. One Justice wrote a 16 page dissension.
This decision caused:
- More files to be reopened causing already overloaded claims departments to almost burst at the seams.
- Benefits paid that carriers or rating agencies did not expect until the decision
- Carriers struggled to recapture some of the premium as the time to charge premiums to each employer’s Mod had long passed
- The big carriers stopped writing business in the NC
- Self insured and alternative methods of insurance flourished
- The Industrial Commission’s caseload increased sharply as ancient claims had a benefit reopened
- Files that needed to be litigated were now in the mix with old medical benefit files causing delays.
- File settlements on small medical files were rampant just to close them out.
The same situation may occur in Florida unless the Supreme Court overturns the decision. The decision involved an injured firefighter – a public servant.
The case on its own single merits did seem to point to paying above the TTD limit. When one looks at the forest, though, this single Workers Comp decision could cause a WC mess in Florida.
©J&L Risk Management Inc Copyright Notice