Florida Tweaks Its Workers’ Compensation Law

A variety of changes to Florida’s workers’ compensation law went into effect July 1.

Gov. Rick Scott signed into law CS/HB 1087, a catch-all insurance bill that includes changes relating to workers’ compensation policy cancellations, premium audits and prepaid benefit cards.

One change allows injured workers to receive their monetary benefits in the form of a prepaid card. Under the previous law, benefits were only payable by check or direct deposit into an injured worker’s bank account.

If injured workers choose the prepaid card option, they must have at least one means of accessing their weekly benefits without incurring any fees. They must also have the ability to make point-of-sale purchases without incurring fees from the financial institution issuing the card.

The new law changes the state’s Special Disability Trust Fund assessments from a fiscal year to a calendar year basis. The Division of Workers’ Compensation has set the assessment rate on workers’ compensation insurers; assessable mutual, electrical cooperative self-insurance funds; and individual self-insurers at 1.46 percent of their net written premiums from July 1 through December 31. Come January 1, 2012, the assessment rate will drop to 1.44 percent.

Also under the new law, employer workers’ compensation premium audits are no longer required unless mandated by the insurance policy, or requested by regulators or insureds.

Under the prior law, when an insured requested a cancellation of a workers’ compensation policy, the cancellation became effective when the insurer sent a formal notice of cancellation to the insurer. The new law strikes that provision and provides that the effective date of the cancellation is either the date requested by the insured or the date of the written request if no date is specified.

The new law also clarifies who must be notified regarding renewal premium, nonrenewal, cancellation or termination of a workers’ compensation policy.

Under the prior law, a “first named insured” is generally the first named insured on the policy declaration, which has the legal authority to administer the policy. However, a company operating in multiple locations may name each location as a “named insured.” As a result, even if the company’s headquarters administers the policy, the other locations must receive certain policy notices.

Under the new law, insurers may send a notice of renewal premium or nonrenewal of a policy to only the location that administers the policy. Industry representatives said this will reduce the administrative cost of sending multiple certified mail notices to all named insureds.