WORKERS COMPENSATION AND THE 2001 LEGISLATIVE SESSION

SOURCE: Mary Ann Stiles
General Counsel – Associated Industries of Florida

The Legislature left a lot on the table for the employees and employers of this state. The House simply ran out of time. The House was unable to get a carefully crafted compromise to the floor and back to the Senate partially due to the confusion caused by the FCCI Insurance Group, NFIB, FUBA, The Florida Chamber and the Florida Retail Federation, who got confused and did not understand the possible effects of the total bill, but relied on erroneous & inaccurate information supplied by the National Council on Compensation Insurance (NCCI). Due to the tactics used to kill the bill and the actions of NCCI, AIF received a lot of pressure to drop the post-MMI indemnity benefit increase to injured workers.

The proposed increase in SB ll88 and HB l927 that died would have doubled an injured workers’ impairment benefits after maximum medical improvement. NCCI advised that this would cause anywhere from a 6 percent to a 6.7 percent premium increase. AIF believes that other changes in the workers compensation bill that died more than offset the increase. The number of injured workers that collect permanent total due to the fact there are few benefits after maximum medical improvement would have been reduced. The system will always find a way to cost shift when the benefits are not sufficient, and that is what Florida has done. It is the main reason, coupled with the substantial amount of litigation, that Florida has the highest rates in the nation but the lowest statutory benefits. The benefits actually paid to injured workers, while not contemplated by statute, is equal to those of other states of comparable size and make-up.The three problem areas - - - permanent total, attorneys’ fees and the medicare reimbursement schedule in the Senate bill that would have increased the costs had already been worked out. Those who had not lobbied this issue all session, chose the last week of the session to try to kill the Senate bill. Of course, all of their antics played into the hands of the claimants’ bar who wanted to see no changes made to the lucrative system they have enjoyed and thanks to the above organizations, will continue to enjoy.

With all of the chaos, one workers compensation bill did pass – it took two years, but a non-controversial bill did pass. It was HB l803. The following provisions are in that bill:

12. S.61.14, F.S. provides that when approving lump sum settlements, a JCC must consider if the settlement serves the interest of the worker and the worker’s family when considering the appropriate recovery of any child-support arrearag.

2. S.6l.30, F.S. provides that income shall mean all workers compensation benefits and settlements.
   
   
3. S.440.02(l4)ll. provides that a person who performs services as a sport official for an entity sponsoring an interscholastic sports event or for a public entity or private, non-profit organization that sponsors an amateur event is an independent contractor and not an employee. This includes any person who is a neutral participant in a sports event including umpires, referees, judges, linespersons, scorekeepers or timekeepers. This definition does not apply to any person employed by a district school board and who serves as a sports official as part of his/her job.
   
   
4. S.440.02(16)5 provides that employment does not include a state prisoner or county inmate, except those performing services for private employers or those listed in s. 948.03(8)(a).
   
   
5. S.440.09(2) clarifies that employees covered under The Defense Base Act are not covered under the state’s workers compensation system.
   
   
6. S.440.l025 provides that a public employer seeking a premium discount due to workplace safety must have a workplace safety program.
   
   
7. S.440.12; 440.20(l)(a) and 440.20(6) allows a carrier, with the authorization from an employee, to deposit his or her benefit check directly into an employee’s bank account.
   
   
8. S.440.l35 eliminates the requirement of mandatory managed care and makes the program voluntary.
   
   
9. S.440.13(2)(f) allows the employee, upon written request, the right to a one time change of physician for any reason during the course of treatment for any one accident. The employee is entitled to select such physician from not fewer than three carrier authorized physicians who are not professionally affiliated.
   
   
10. S.440.l3(3)(a) deletes the requirement that physicians in order to be certified by the Division must complete a 5 hour course on the aspects of workers compensation.
    
    
11. S.440.13(4)(c) provides that authorized qualified rehabilitation providers are allowed access to medical records.
    
    
12. S.440.l4(5)(a) clarifies that if there are any wages as a result of concurrent employment, the employee is responsible for providing information concerning same to the employer/carrier. No penalties, interest, costs and attorneys fees are paid during any period for any benefits that the employee has not advised the employer/carrier of the information necessary to calculate the average weekly wage to include concurrent employment.
    
    
13. S.440.l85(9) allows the division to contract with a private entity for the collection of policy information required to be filed by carriers to include the receipt of notices of cancellations or expirations of policies.
    
    
14. S.440.192(1) requires that a petition must be filed by certified mail or by electronic means with the Office of the Judges of Compensation Claims (a new office under the Department of Administrative Hearings). Copies shall also be served upon the employer and the employer’s carrier. The Deputy Chief Judge (a new position created under DOAH) shall refer the petitions to the judges of compensation claims.
    
    
15. S.440.l92(2) requires that the JCC shall review and dismiss each petition or a portion of the petition (docketing orders and docketing judges were eliminated in section 440.45(3); however, this language still maintains the requirement for the judge to dismiss petitions or portions of petitions that do not meet the filing requirement of the statute.) This section further provides for additional information on the petitions to include: the date or dates of accident; the specific classifications of compensation that were not timely paid; and the date that the request for mileage was filed with the carrier and requires that a copy must be attached to the petition. An assertion by the carrier to dismiss a petition that is not specific is waived if not done within 30 days of receipt of the petition.
    
    
16. S.440.192(8) requires that the employer/carrier file a Response to Petition rather than the Notice of Denial, especially when all benefits listed in the petition have been paid or agreed to.
    
    
17. S.440.l92(4) clarifies that the initial provision of compensation or benefits means the first installment of compensation or benefits to be paid by the carrier under subsection (2) or pursuant to a petition for benefits under s.440.l92(8) in determining when benefits should have been paid without penalty when the carrier exercises its right to investigate the employee’s entitlement to benefits to either admit or deny compensability within 120 days after the initial provision of compensation or benefits.
    
    
18. S.440.20(ll)(a)(b) and (c) are substantially changed to allow a JCC to approve lump sum settlements only when the claimant is not represented by counsel. When the claimant is represented by counsel, the JCC would still have authority to approve any fees paid by the employee to his attorney or any issue relating to the payment of child support arrearages provided for in a lump sum settlement stipulation. JCCs are required to consider "whether any and all benefits, including settlements, provide for the appropriate recovery of any child support arrearages. JCCs would have no other authority over settlements. All orders are payable within l4 days rather than the current 7 days. The only information or documentation needed to be submitted to the JCC is documentation necessary for a claimant’s attorney to support their fees charged to the employee. Any order entered herein is not considered an award and is not subject to modification or review. Settlements entered into when both parties are represented by counsel are valid for all dates of accidents.
    
    
19. S.440.20(ll)(a) changes the l20 day requirement for lump sum settlements so that the l20 day period would begin to run when the employer receives notice of the injury rather an from the date of the injury
    
    
20. S.440.22 eliminates the exemption of workers compensation claims from creditors as to an award of child support or alimony.
    
    
21. S.440.25 provides that the claimant or the adjuster may, at the mediator’s discretion, attend the mediation by telephone if agreed to by the parties.
    
    
22. S.440.25(4)(b) requires the consent of the claimant for the second continuance of a final hearing.
    
    
23. S.440.25(4)(c) requires a JCC to enter an order within 30 days, and not l4 days, after the final hearing is completed. The summary manner language is deleted. The JCC may enter an abbreviated order in cases in which compensability is not disputed. Either party may request separate findings of fact and conclusions of law.
    
    
24. S.440.25(4)(g) which required JCCs to adopt and enforce uniform rules was deleted.
    
    
25. S.440.25(5) eliminates the division from the process of insolvency petitions.
    
    
26. S.440.38 limits the types of security deposits that self insurers can use; the right to call a qualifying security deposit; irrevocable letter of credit with financial institutions located within this state and requires current self insurers to comply on or before December 31, 200l or upon the maturity of existing security deposits, whichever occurs later.
    
    
27. S.440.44 requires that The Office of Judges of Compensation Claims shall maintain the l7 district offices, 3l judges of compensation claims, and 3l mediators as they exist on June 30, 200l
    
    
28. S.440.442 requires judges of compensation claims to observe and abide by the Code of Judicial Conduct.
    
    
29. S. 440.45 transfers the judges of compensation claims to the Office of Management Services and creates The Office of Judges of Compensation Claims headed by a Deputy Chief Judge who will report to the director of the Division of Administrative Hearings. The Deputy must "demonstrate prior administrative experience". The current Chief Judge’s term expires October l, 200l and the position of Deputy Chief Judge is created. Changes the qualifications of appointing Judges from "being a member of The Florida Bar in good standing and is knowledgeable in the practice of workers compensation law" to "a member of The Florida Bar in good standing for the previous 5 years and is experienced in the practice of workers compensation." As of July l, 2002, when the nominating commission determines whether a judge’s performance is satisfactory, the commission shall consider if the judge has met the requirements of this chapter. Allows the Governor to fill vacancies for JCCs and such person can serve for up to l20 successive days. Allows the Director of DOAH to receive or initiate complaints, conduct investigations, and dismiss complaints against the Deputy Chief Judge or any JCC on the basis of the Code of Judicial Conduct. The Director may recommend for removal or discipline of any judge whose conduct warrants.
    
    
30. S.440.45(3) repeals docketing orders and docketing judges.

31. S.440.45(5) provides for a report to various entities annually summarizing the amount, cost and outcome of all litigation and the disposition of mediation conferences, the number of mediation conferences held, the number of continuances granted for mediations and final hearings, the amount of attorney’s fees paid in each case according to accident and order year and the number of untimely orders entered. If judges are generally unable to meet any guidelines due to it being beyond their control, the Deputy Chief Judge shall submit such findings and recommendations to the Legislature.
    
    
32. S.440.49(2)(e) conforms the repeal of the Special Disability Trust Fund Privatization Commission.
    
    
33. S.440.593 allows employers or carriers to submit required forms electronically, either directly or indirectly through a third party; allows the division to revoke the certification of any carrier or vendor in noncompliance with performance standards; and allows the division to assess a civil penalty not to exceed $500 for each such violation. i.e. the untimely filing of a Notice of Injury.
    
    
34. S.489.114, 489.ll5, 489.5l0 and 489.5l5 resolves the conflict in that one of the prerequisites for obtaining a contractor’s license under Chapter 489 is to have proof of coverage or proof of an exemption under s.440.l05 and then to show proof of a contractor’s license. A person cannot meet these prerequisites simultaneously. The statute will now allow an applicant for initial issuance of a certificate and renewal as a contractor as a prerequisite to qualifying for an exemption from coverage to file an affidavit attesting that he will obtain an exemption within 30 days after the initial certificate or renewal is issued by the Board.
    
    
35. S.627.914 requires carriers and self-insurance funds to file certain premium, dividend, and loss date to the Department of Insurance. The Legislature established this requirement in l978 when the Department used this information to evaluate rates. Now, statistical agents and rating organization collect calendar year-accident data which have been used in rate making since the early l980’s. Since the department does not use that data, this section eliminates the requirement to report such data to the department. Now instead of April lst it will be July lst that insurers will continue to report such information to their statistical agent or rating organization. Self insurance funds would also be required to submit such data.
    
    
36. S.627.09l5 reinstitutes the authority to allow for a safety premium credit to those who have implemented a safety program pursuant to the provisions of the rating plan.
    
    
37. S.627.3ll would correct an inadvertent error by inserting the word "not" before the word "unlawful." As a result, a board member of the FWCJUA would immunity from civil liability only when the board members reasonably believe that his or her conduct was not criminal.

 

WHAT DID NOT PASS THIS LEGISLATIVE SESSION

 

SB ll88/HB l927 died in Senate messages to the House in the last hours of the session. Included in this bill were the following:

 

12. Exemptions – Effective January l, 2002, two corporate officers or of any group of affiliated corporations can be exempt from coverage and allows such election only to a corporate officer that has ownership of at least l0%.

Provides that every enterprise conducting business shall maintain business records re exempt officers; any partnerships with exempt partners must maintain written exemptions; sole proprietor or partners must maintain a copy of federal income tax records for the immediate previous three years; failure to have these records allows the division to issue a stop-work order if such affidavit and tax returns are not available within 3 business days; a corporation must be listed on the records of this states’ Secretary of State as a corporate officer; if not listed and no affidavit re being a corporate officer is not available, the division can issue a stop work order if such documents are not furnished within 3 days.

Notwithstanding any other provision, effective January l, 2004, any partnership, corporation or sole proprietor, regardless of the number of employees, actively engaged in the construction industry shall secure and maintain workers compensation coverage at all time. (This does not address the serious problem with the use of independent contractors by businesses who allege these individuals to be independent contractors when they are in fact employees and in any other industry would be covered)

2. Permanent Total Disability – Eliminated the social security provision from the definition of permanent total. The NCCI stated this change alone would save l.8 percent in premiums. Also provided that an injury had to be of a nature and severity that prevents the employee from being able to perform his or her previous work. If the employee is engaged in or is capable of engaging in any gainful employment, he is not entitled to these benefits. The burden is on the employee to establish that such work is not available within 50 mile radius of the employee’s residence.
   
3. Coverage issues – In cases involving occupation disease or repetitive exposure, both causation and sufficient exposure to support causation shall be proven by the preponderance of evidence; provides that if an employer misrepresents to a carrier the size or classification of the employer’s payroll, such failure or misrepresentation allows the division to issue a stop work order.
   
4. Tort Actions – eliminates the right of an employee to sue another employee of the same employer when assigned to unrelated works; provides that if an employee recovers damages from an employer by either judgment or settlement, the carrier has the right to an offset against the benefits it paid.
   
5. Attendant Care – clarifies that those who maintain their regular employment and provide attendant care to a family member shall be paid the per-hour value of the person’s employment not to exceed the per hour value of such care in the community. The current law only addresses those who quit their work to provide such care.
   
6. Independent Medical Exams (IME) – Upon written request of the employee, the carrier shall pay the cost of one IME per accident. The cost of any additional IME is the responsibility of the party ordering same. However, if a JCC relies on a claimant’s IME at the final hearing, the employer/carrier shall be responsible for payment. Eliminates the criteria to get an IME and the language that a claimant’s attorney can’t set an IME; allows the employee or the carrier to submit into evidence only one IME per specialty; in cases involving occupational disease or repetitive trauma, no medical opinions are admissible unless based on reliable scientific principles sufficiently established to have gained general acceptance in the pertinent area of specialty; provides no attorney’s fees by the carrier for the claimant’s attorney relating to any IME issue. Also allowed IME opinions into evidence.
   
7. Medical Fee Schedule – With the elimination of mandatory managed care, authorization was included to allow entities to contract for fees up to l25% of the fee schedule. Since managed care was made voluntary in another bill, and this language did not pass, fees charged for medical care may not exceed the fee schedule. May can be read as permissive.
   
8. Managed Care – defined grievance to mean "a direct written complaint filed by the injured worker" due to the managed care arrangement refusal to provide medical care; provides that within l5 days after the date of the request for medical care is received that it must be granted or denied. If not responded to within l5 days, the request is deemed granted and the grievance procedures exhausted.
   
9. Average Weekly Wage – Cleaned up the definition of average weekly wage calculation by eliminating the week of injury from the calculation and eliminated "consecutive period of 91 days"; required a record of the employee’s earnings for the l3 weeks before the date of injury be attached to the Notice of Injury filed by the employer; provided for expedited resolution of the average weekly wage without a final hearings on the issue.
   
10. Psychological Issues – eliminated compensation for any preexisting mental, psychological or emotional conditions.
    
11. Increased Impairment Benefits – doubled the amount of benefits an injured employee received after maximum medical improvement from "50% of the employee’s average weekly temporary total disability benefits" to "l00% of the employee’s compensation rate." If a person earned $500 a week prior to injury with a 5% impairment the benefits would be $5,002.50 rather than $2,50l.25 paid today.
    
12. Office of Employees’ Assistance (EAO) – Allows the division to initiate contact with the injured employee after receiving a copy of the petition to discuss rights and responsibilities of the employee and services available from the Employees’ Assistance and Ombudsman Office; allows the Office to attempt to facilitate an agreement between the parties. This was permissive in that the Request for Assistance was eliminated.
    
13. Request for Assistance (RFA) – eliminated the necessity of filing one.
    
14. Petitions – Added to the list of what must be filed with the petition "a copy of the physician’s request, authorization or recommendation for treatment or attendance care", when the employee is requesting medical treatment or a change in medical care. Today such petitions are filed and the carrier has no knowledge of the reason for the request being made in the first place. It is petition by ambush to guarantee an attorney’s fee.
    
15. Lump Sum Settlements and Child Suport Arreages – HB l803 which passed provides that the JCC must consider whether the settlement provides for the appropriate recovery of any child support arrearages. While this was not intended to force a higher settlement to cover child support payments, this language certainly sounds that way. Not passed in HB l927 was the language that stated that the JCC would consider the settlement allocation and if it provided for appropriate recovery for child support arrearages. Also not included in the bill that passed was language that stated neither the employer nor the carrier has a duty to investigate or collect information regarding child support arrearages. The bill that failed provided that any conflicts between any provisions relating to child support arrearages was superceded by HB 1927.
    
16. Mediations – One of the major issues that failed was the new mediation process. This process would have guaranteed prompt decisions to injured workers by requiring that within 90 days after the Petition was filed, a mediation conference had to be held. Within 40 days after the petition being filed the JCC was to notify parties by order that unless a mediation had already been held, such order had to give the date by which mediation must be held. Provided that continuances granted only for reasons that are beyond the party’s control who requested the continuance. Provided that any order granting a continuance must set for the new mediation date. Provided that mediation is not to be used solely to mediate attorneys’ fees. Provided that unless the parties conducted a private mediation, the mediation would be conducted by a public mediator. If no public mediator was available, the parties were required to attend a private mediation at the expense of the carrier within the 90-day time frame. If the parties could not agree on a mediator, the JCC would appoint a mediator. Today it takes up to a year in some parts of this state to get a mediation scheduled. Some JCCs allow continuances without good cause. The injured employee is caught between his own attorney, the JCC, the system and the carrier and its defense attorney. Expenses would have been greatly reduced and the animosity felt by injured workers who can not get an answer for a lengthy period of time would have lessened.
    
17. Pretrial stipulations – Required the parties in good faith to complete a pretrial stipulation at the mediation conference if the issues were not resolved. If the stipulations are not completed timely, the JCC was required to hold a pretrial hearing within l4 days. Today both sides wait months for the pretrial to be set or for the stipulation from either the claimant’s attorney or the defense attorney. And some judges do not set the final hearing until the pretrial stipulation is received. In the meantime, hours are being churned in the files by plantiff attorneys.
    
18. Final Hearings – Required that the final hearing must be held within 90 days after the mediation conference. Allowed continuances only for reasons beyond the party’s control; the order had to state the new date of final hearing if continuance granted; and if a JCC granted two or more continuances the JCC had to report the continuances to the Deputy Chief Judge. These provisions guaranteed that all Petitions had to be resolved or a final hearing held within 2l0 days from the filing of the petition. Today injured workers in some parts of this state can’t get a final hearing for over one and one-half years. Some case are as long as 3 to 5 years. Some Judges simply do not push their docket and require that all petitions be resolved in a timely manner. Of course, such lack of attention to their dockets results in increased hours by attorneys in files.
    
19. Expedited Hearings – Added to the provisions that expedited dispute resolutions for any claim for benefits under $5,000 or less the issues of medical only benefits or medical mileage. Requires l5 days notice and no more than 30 minutes a side and neither party is required to be represented by counsel.
    
20. Motions to Dismiss for Lack of Prosecution – Required a JCC to either on his motion or a party’s motion to dismiss a petition that has had no record activity for l2 months. The Workers Compensation Rules of Procedure has made it more difficult for a carrier to get a petition dismissed. This provision would have followed civil rules of procedure.
    
21. Interest on Medical Bills – Prohibited a JCC from awarding interest on medical bills.
    
22. Attorneys Fees – Increased the formula for attorneys’ fees from 20/l5/l0/5 to 25/20/l5/l0. Allowed a one time additional fee per accident on medical only petitions to be based on an hourly rate not to exceed $l750. As to compensability issues, if the JCC found that the formula did not adequately compensate the claimant’s attorney, the JCC could award an additional fee, based on a reasonable hourly rate not to exceed $5000. The bill eliminated all other use of the hourly rates. Attorneys’ fees did not attach to the petition until 30 days after the receipt. Today the employer/carrier has 30 days from the receipt of the Request for Assistance and l4 days from the receipt of the petition to pay benefits before attorneys’ fees attached. The problem is that in most instances the carrier does not get the Request for Assistance and the only notice it gets that benefits are requested is when it receives the Petition. The bill that failed would have required the petition be furnished to the employer and the carrier and then it had 30 days to either pay or deny. Many more injured workers would have gotten benefits faster under the bill that failed. Today attorneys purposely do not send the Request for Assistance to the carrier, in that it plays "petition by ambush" to guarantee an attorney’s fee.
    
23. Evidence – No duty is imposed on the carrier to preserve evidence pertaining to an accident or injury. It would have clarified that it is the employer’s responsibility as the carrier has no control over the employer’s property.
    
24. Firefighters – Excluded firefighters from the definition of permanent total and allows firefighters a presumption that a disability may be permanent and total disability.
    
25. The Workers Compensation Oversight Board – Repealed the Board. It is rumored that this board was actually repealed in another bill.

Effective Date – The law was to become effective 1/1/02.