OIR Releases Workers Compensation Report
The Florida Office of Insurance Regulation has released its most recent annual report discussing the state of Florida’s workers’ compensation insurance market. According to section 627.211(6), Florida Statutes, the Office of Insurance Regulation must prepare a report for the legislature each year assessing the competitiveness of Florida’s workers’ compensation market. In this year’s report, the OIR concludes the market is competitive because, among other things, a large number of independent participants are writing coverage in this state and none has meaningful control over the market. Additionally, there are no significant barriers to entry and exist. The OIR characterizes the market as “well capitalized and robust.”
According to the report, out of the country’s six most populous states, Florida is one of only two in which the residual market does not dominate. The report points to prior legislative reforms as greatly reducing workers’ compensation rates in Florida, but acknowledges that the rate reductions have flattened and recent years have seen small increases.
The report cites drug costs, the costs of inpatient and outpatient care, and the costs of ambulatory surgical centers as areas where further legislative reforms could reduce rates. The OIR estimates the reductions could range from 8.6% to 9.4% if the legislature were to adopt fees schedules based on specified percentages of Medicaid rates.
The legislature is expected to give some consideration to workers’ compensation issues in the upcoming 2013 legislative session. The potential for savings in areas noted by the OIR will be among the ideas considered.