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Florida E-Mod System Changed By Court of Appeals- Shocker

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Florida E-Mod System v. Court of Appeals

The Florida E-Mod system took a massive hit last week when a Court of Appeals decided that the state’s limit on Temporary Total benefits were unconstitutional.

Picture Of Judges Chair Florida E-Mod System In Court Room
StockUnlimited

I find these types of decisions repugnant as try to “socially legislate”  Workers Compensation benefits ends us creating Workers Compensation crises.  One bad decision such as this can wreck the whole system.     

One has to remember that the insurance carriers have underwritten claims where the 106 week Total Temporary (TTD) benefit maximum was solidly in place.  Now, the plaintiff bar will be lining up to feed at the new trough that this decision has unfortunately made for the state of Florida.  


How do the carriers make up for this new “social legislation?”  They can just change their Loss Cost Multipliers (LCM’s)  to fit the situation.  However, the carriers will likely have to greatly increase the LCM’s as they will be attempting to make up ground as they will likely have to pay extra benefits on claims where there were no premiums paid for any TTD  benefits. 


This situation can cause the Florida Workers Comp system to snowball back to when their whole Workers Comp system was in chaos.  Insurance carriers can quickly start to “cherry pick” their insureds leaving certain Workers Comp markets and employers to fend for themselves. 


Vector Graphic of Florida E-Mod System Clock and Dollars
123RF

I had worked under one of these situations in the past.  In the 1990’s a NC Supreme Court decision ruled that medical benefits for non-settled Workers Comp claims could never be closed out.  This “social legislation”  caused some of the major carriers to leave the state.  The remaining carriers charged very high rates as they had no accounted for any Workers Comp claim since the 1930’s as a possibly reopened file.  

From the article – 

  • During oral arguments last month, Allen Winsor, an attorney for the state, defended the benefits limits and said they have to be viewed within the “broad picture” of the workers compensation insurance system. He said lawmakers approved the limits as a way to reduce costs at a time when businesses struggled to afford insurance. 
  • The judges stopped short of addressing other parts of the workers compensation system, but attorneys who represent workers have long complained about steps the Legislature has taken to reduce insurance costs. Much of the debate has centered on 2003 changes that have led to an overall 56 percent drop in workers compensation insurance rates.

Plaintiff attorneys complained about reducing the costs of Workers Compensation to employers.  How do employers make up the difference?   They can either layoff workers or pass the cost onto the ultimate consumer.    Hopefully the Florida E-Mod system will not incur any more heavy changes such as this one.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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