House panel hears workers' comp horror stories.
And part of the problem is legislative reform passed last year intended to crackdown on fraud in the construction industry but which has caused some small businesses to close.
That was among the testimony heard by the Florida House Select Committee on Workers' Compensation Reform, which held it's first meeting February 1.8. It was scheduled to meet again March 4, as this News went to press, and Chair Rep. Dennis Ross, R-Lakeland, said he intends to have four or five meetings in the first two weeks of the session and then come up with legislation.
The session also began March 4, and is scheduled to end May 2.
"We have a tremendous task ahead of us," Ross told the committee and audience. "It's going to be very difficult. I'm not so sure we're going to have an opportunity to find all the answers, but we're going to make every attempt to investigate and find all the answers."
Noting he's starting his second term in the House, Ross, who represents insurers in workers' comp cases, said he found it difficult to find compromise when he tackled workers' comp matters in his first term. This time, he said, "in order to make substantive and quality reforms, everyone is going to have to give a little."
Martha Stanley, the wife of a catastrophically injured worker, said the system severely aggravates the devastating changes the hurt employees and their families face. Needed medical care is routinely denied, timelines for providing benefits are ignored, carriers require workers to use certain doctors and those physicians routinely downplay injuries or deny care, and sometimes carriers just cut off benefits without a reason. That forces workers to refile their cases.
"This is fraud and harassment," Stanley said.
While critics say there is an over involvement of lawyers in the system, Stanley said the system provides no help, and there's "no one for injured workers to complain to except an attorney. . . . The injured worker with a catastrophic injury is relegated to a subcitizen status."
Greg Schmidt, whose nurse wife was also catastrophically injured, agreed. He said it can take 18 months to go through mediation and court to get medical treatment approved - and it's considered fraud if the employee uses his or her other health insurance coverage. Injuries can get worse in the time it takes to get that treatment, he noted.
The state Employee Assistance Office, which is supposed to help injured workers, usually advised them to get a lawyer, and the office has no enforcement powers, Schmidt said. The system is so difficult that the effect is "you're severely punished for filing a workers' compensation claim," he said.
Business representatives weren't any happier.
Mike Blankenship, a Tallahassee underground utilities contractor who is also involved with similar companies in Alabama and Georgia, said his workers' compensation premiums are twice as high for Florida as the other two states. And his Florida premiums have gone from $51,000 in 1998 to $205,000 for 2003.
He said after one of his employees, who was 55, was in a company truck that was hit by another vehicle and then two days later complained of back problems, his carrier told him to assume the man was totally disabled. The company also reserved $160,000 to pay for the case.
In response to a question, Blankenship said he hadn't seen any impact from SB 108, passed last year, and which required that every worker on a commercial construction site valued at more than $250,000 to be covered by workers' compensation. Companies had been allowed to exempt officers and owners, but critics said that led to abuse that cost carriers more than $1 billion in lost premiums. Blankenship said he supported ending exemptions.
But James Bumgarner, who runs a one-person door and hardware installation company, said the law has been disastrous for businesses like his. Already two other similarly other small operations have closed their doors in the Clay County area.
The reason, he said, is that now he must have insurance to work on most commercial construction sites -- and little if any coverage-is available for companies like his. At first, Bumgarner couldn't find any insurance. When he looked into joining the state's Joint Underwriting Association, he was quoted a rate of more than $16,000 on a salary calculation of $18,000.
"This is probably one of the worst things we did last year," Rep. Ross said, telling Bumgarner the legislature will work to change the law this year. "The intent was to address the abuse of exemptions."
Other business owners complained that contractors from Alabama and Georgia are outbidding them on jobs in North Florida and then illegally not paying Florida workers compensation rates. They said that carriers are also putting restrictions on what types of functions they can do. One officer of a temporary employment agency said she had to give up her largest client--which in turn lost 25 percent of its manufacturing ability -- because her carrier refused to cover workers there, despite an excellent claims history.
Rafael Gonzalez, who is monitoring legislation for the Bar's Workers' Compensation Section, praised Ross' and the committee's approach.
"It gives everybody who has anything to do with workers' comp a chance to vocalize the problems they have with the current system," he said. "I think the committee will do a nice job. It will give everyone a chance to put out what their perceptions of the problem are and what their difficulty with the present system is. That in itself will be valuable.
"The employers need to be out there telling us what their problems are .... We need to hear from the market, we need to hear from insurers."
Gonzalez said that Ross has been working closely with the section and other interested parties since last session and is looking to prepare legislation that will punish either side for actions that delay a claim getting to an early hearing.