Summary of SB 50A Florida Workers Compensation Law 2003 Summary of SB 50-A (as Enrolled) by Senators Clary, Alexander, and Atwater

Benefits
Other Benefits
Compensability for Injuries
Safety in the Workplace
JUA (Availability and Affordability of Coverage)
Independent Medical Examination; Dispute Resolution
Attorney's Fees
Medical Fee Reimbursement
Coverage Requirements and Construction Industry Exemptions
Compliance and Enforcement -- Fraud
Carrier Compliance
Horizontal Immunity
Intentional Torts

Permanent Total Disability - An injured employee who has the following injuries is presumed to be permanently and totally disabled unless the employer or carrier establishes that the employee is physically capable of engaging in at least sedentary employment within a 50-mile radius of the employee's residence:
· spinal cord injury involving severe paralysis of an arm, a leg, or the trunk;
· amputation of an arm, a hand, a foot, or a leg involving the effective loss of use of that appendage;
· severe brain or closed head injury;
· second degree or third-degree burns of 25 percent or more of the total body or third degree burns of 5 percent or more to the face and hands; or
· total or industrial blindness;

In all other cases, the employee must establish that he or she is not able to engage in sedentary employment, within a 50-mile radius of the employee's residence, due to physical limitations.

The current definition of "catastrophic injury" would continue to be used for the purpose of the sections of law that would require employers to pay for the health insurance premiums for law enforcement officers and firefights who have a catastrophic injury.

Provides that an employee is eligible to receive permanent total disability after age 75, and receive the annual 3% supplementary benefit after age 62, if the employee was not eligible for social security benefits due to the compensable injury causing the employee to not have a sufficient number of quarters to qualify.

Temporary Total Disability -- The bill maintains the current temporary total disability benefit, which is paid at the rate of 66 2/3 percent of the employee's average weekly wage, up to 100 percent of the statewide average weekly wage. The TT benefit is paid for up to 104 weeks, or upon maximum medical improvement, whichever occurs first. For 2003, the maximum TT benefit is $608 per week. After reaching MMI, the employee may be completely healed and return to work, or may have a permanent impairment that may or may not affect his wages. Permanent impairment benefits, described below, are determined upon reaching MMI.

Permanent Partial Disability --The bill would revise the impairment benefits for a permanent partial disability, by increasing the amount of the benefit from 50 percent to 75 percent of temporary total disability benefit, (i.e., increased to 75 percent of 66.6 percent of average weekly wage (AWW), or about 50 percent of AWW, rather than 50 percent of 66.6 percent of AWW, or about 25 percent of AWW). But, the amount of the impairment benefit would be reduced by 50 percent (i.e., to about 25 percent of average weekly wage) if the employee is able to earn the same wage or greater after the injury.

The duration of this benefit would be changed from the current 3 weeks for each percent of impairment to the following schedule:
· 2 weeks for each percent of impairment from 1 to 10 percent;
· 3 weeks for each percent of impairment from 11 to 15 percent;
· 4 weeks for each percent of impairment from 16 to 20 percent;
· 6 weeks for each percent of impairment from 21 percent and higher.

The bill eliminates the supplemental benefits ("wage-loss" benefits) that are currently paid only to employees who have at least a 20 percent impairment and who are unable to earn at least 80 percent of their pre-injury wage.

Permanent impairment benefits are limited for the permanent psychiatric impairment to 1 percent permanent impairment.

Provides that only the disability or medical treatment associated with a compensable injury is payable, excluding a preexisting disability or medical condition.

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Increases caps on chiropractic treatments from 18 to 24 visits and the number of weeks of treatments are increased from 8 to 12 weeks.

Increases benefits for funeral expenses from $5,000 to $7,500 and death benefits are increased for dependents from $100,000 to $150,000.

Provides that benefits for training and education authorized by the Department of Financial Services and funded by the Workers' Compensation Administration Trust Fund may include payment to attend a community college or vocational-technical school; provides that this benefit would include securing a general education diploma (GED). The bill provides that temporary total compensation benefits paid during the training and education would be included within, and not added to, the maximum 104 weeks provided for temporary total benefits.

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Requires that an accidental compensable injury must be the major contributing cause of any resulting injury, meaning that the cause must be more than 50 percent responsible for the injury as compared to all other causes combined, as demonstrated by medical evidence only.

An injury or disease caused by toxic substance would require clear and convincing evidence establishing that exposure to the specific substance caused the injury or diseases sustained by the employee.

In cases involving occupational disease or repetitive exposure, both causation and sufficient exposure to support causation must be proven by clear and convincing evidence.

Pain or other subjective complaints alone, in the absence of objective relevant medical findings (as further described), are not compensable.

For mental and nervous injuries, there must be a physical injury requiring medical treatment which is the major contributing cause. The mental or nervous injury must be demonstrated by clear and convincing evidence. Payment of temporary benefits for mental or nervous injuries are limited to no more than six months, after the date of maximum medical improvement for the employee's physical injury, which shall be included in the 104-week period.
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Requires the Division of Workers' Compensation to publicize on its Internet site, and encourage carriers to publicize, the availability of free safety consultation services and safety program resources. All policyholders in the Florida Workers' Compensation Joint Underwriting Association are required to participate in a safety program.

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Revises the current subplans within the Florida Workers' Compensation Joint Underwriting Association (JUA) to address affordability and availability for small employers and charitable and nonprofit organizations. The premiums for small employers with 15 or fewer employees and an experience modification factor of 1.10 or less would be capped at 125 percent of the rate for the voluntary market manual rate, and premiums for charitable organizations meeting certain criteria with an experience modification factor of 1.10 percent or less would be capped at 110 percent of the voluntary market rate. Any deficits would be assessed against such employers.

The board of the JUA would be reduced from 13 to nine members. Currently 11 of the 13 members are chosen by insurance industry representatives. Under the bill, three members are appointed by the Financial Services Commission; two members by domestic insurers (Florida domiciled); two members by foreign insurers (non-Florida domiciled); one member by the largest property and casualty insurance agents' association; and the Insurance Consumer Advocate of the Department of Financial Services. The Financial Services Commission would designate a member of the board to serve as chairperson.

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An employer and employee would each be limited to one independent medical examination (IME) per accident rather than one per medical specialty; requires carrier to pay for only one; and allows injured worker to recoup costs of an IME if employee prevails in a medical dispute, as determined by a JCC, or if benefits are paid or treatment provided after employee has obtained an IME.

As an alternative, the bill authorizes the use of consensus medical examinations to resolve medical disputes, if both parties agree, that would be binding on both parties and would constitute resolution of the medical dispute. The bill also allows an employee and employer/carrier to mutually agree to enter into binding claim arbitration in lieu of any other remedy provided in ch. 440, F.S. These optional dispute resolution processes that require the consent of both parties; otherwise, disputes would be resolved through the judges of compensation claims.

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The bill continues the use of the current contingency fee schedule in awarding attorney's fees. The fee for benefits secured are limited to 20 percent of the first $5,000 of benefits secured, and 15 percent of the next $5,000 of benefits secured, 10 percent of the remaining amount of benefits secured to be provided during the first 10 years after the claim is filed, and 5 percent of the benefits secured after 10 years.

As an alternative to a contingency fee, the JCC may approve an attorney's fee not to exceed $1,500, only once per accident, based on a maximum hourly rate of $150 per hour if the JCC determines that the fee schedule, based on benefits secured, fails to fairly compensate the attorney for a disputed medical-only claim.

If there is a written offer to settle issues, including attorney's fees, at least 30 days prior to the hearing date for purposes of calculating the amount of attorney's fees to be taxed against the carrier or employer, the term "benefits secured" would include only that amount awarded to the claimant above the amount specified in the offer.

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Increases all physician fees to 110 percent of Medicare reimbursement schedules; increases the maximum for surgical procedures to 140 percent of Medicare; continues to allow deviations from fee schedules in certain circumstances; provides that outpatient observation status cannot exceed 23 hours; includes legislative intent language to pay for increases to physicians by reductions to hospitals; and reduces outpatient reimbursement for scheduled nonemergency surgeries from 75 percent to 60 percent of charges. Reimbursements for prescription drugs are reduced from 1.2 times the average wholesale price plus a $4.18 dispensing fee to the average wholesale price plus a $4.18 dispensing fee.

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Limits construction exemptions to three corporate officers each owning at least 10 percent stock ownership; and eliminates exemptions for sole proprietors and partners, effective January 1, 2004;

Provides that an exemption certificate is applicable to the corporate officer named on the notice of exemption and applies only within the scope of the business or trade listed.

Requires any employer with employees engaged in the construction industry in Florida to obtain a Florida policy or endorsement which uses Florida class codes and rates and failure to comply is a second-degree felony.

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Compliance and Enforcement -- Fraud

Provides several measures designed to fight fraud and increase prosecution of fraud in the workers' compensation system, including:

· Provides that an employer that fails to pay stop-work order penalties is ineligible for an exemption from coverage.
· Requires a carrier to submit an annual report to the department detailing losses and recoveries attributable to workers' compensation fraud and authorizes the department to fine carriers for noncompliance.
· Requires an annual report by the Bureau of Workers' Compensation Fraud and the Division of Workers' Compensation of the Department of Financial Services to provide greater accountability regarding compliance and enforcement activities.
· Authorizes the Division of Unemployment Compensation to release information in certain circumstances concerning an employee's wages to determine if an injured worker is employed and receiving workers' compensation benefits.
· Requires a contractor to request proof of coverage from a subcontractor and requires the subcontractor to provide a copy of the certificate of exemption to the contractor.
· Incorporates certain violations of ch. 440, F.S., in the Offense Severity Ranking Chart which would assist in the prosecution and sentencing of workers' compensation fraud by establishing rankings for these violations.

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Authorizes the department to examine and investigate carriers, self-insured employers and their servicing agents to determine compliance with ch. 440, F.S., and increases the department's authority to examine and fine such entities that engage in patterns or practices of unreasonable delay in claims handling or patterns or practices of harassment, coercion, or intimidation of claimants.

Authorizes the department to impose an administrative penalty in an amount not to exceed $2,500 for each pattern or practice constituting a nonwillful pattern or practice, not to exceed an aggregate amount of $10,000 for all nonwillful violation arising out of the same action. Any administrative penalty imposed under this section (s. 440.525, F.S.) for a nonwillful violation cannot duplicate an administrative penalty imposed under another provision in ch. 440, F.S., or the Insurance Code.

Authorizes the department to impose an administrative penalty for patterns or practices constituting a willful violation in an amount not to exceed $20,000 for each willful practice or pattern. Such fines cannot exceed $100,000 for all willful pattern or practice arising out of the same action.

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Provides immunity to a subcontractor from lawsuits by employees of another subcontractor or the contractor, if the subcontractor is providing services in conjunction with a contractor on the same project or contract work, under certain conditions. The conditions are that the subcontractor or contractor has secured workers' compensation coverage for the subcontractor's employees and the subcontractor's own gross negligence was not the major contributing cause of the injury.

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Provides that the liability of an employer for compensation under s. 440.10, F.S., is exclusive and in place of all other liability except in cases where the employer commits an intentional tort that causes the death or injury of an employee. An employer's actions are deemed to constitute an intentional tort only when the employee proves by clear and convincing evidence that the employer deliberately intended to injure the employee or the employer engaged in conduct that the employee knew was virtually certain to result in injury or death to the employee.

The bill also expands immunity from third-party civil liability for safety consultants to all employees of the employer or employees of its subcontractors on a jobsite.

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