Workers’ Compensation – Setnor Byer Insurance & Risk

Florida approves 6.9% workers’ compensation rate decrease for 2026

Anita Byer

Florida employers will be paying less for workers’ compensation insurance next year. The Florida Office of Insurance Regulation approved a statewide overall average rate decrease of 6.9 percent for workers’ compensation insurance premiums. It will be the ninth consecutive year with a rate decrease. According to Florida Insurance Commissioner Michael Yaworsky, “this rate decrease directly translates to reduced operating costs for businesses, encouraging investment and growth throughout Florida’s economy.” The rate decrease will apply to new and renewal policies beginning January 1, 2026.

The 6.9 percent rate reduction was proposed by the National Council on Compensation Insurance (NCCI), a rating organization authorized to make rate filings on behalf of workers’ compensation insurance companies in Florida. The reduction was based on NCCI’s analysis of data from the two most recently available full policy years (i.e., 2022 – 2023) as of December 31, 2024. According to NCCI, the data supports the following changes to the components of the overall average rate level decrease.

Change in Experience, Development and Trend: 6.9% decrease.
Change in Benefits: 0.4% decrease.
Change in Production and General Expenses: 0.3% increase. Production expenses include commissions and costs associated with processing policies. General expenses primarily consist of salaries and overhead costs.
Change in the Profit and Contingency Provision: no change (0.0 percent). Florida workers’ compensation rates must be determined so that insurers can be expected to earn a reasonable rate of return. This filing proposes no change to the currently approved P&C provision.
Change in Loss-Based Expenses: 0.1% increase. These are expenses associated with the handling of workers’ compensation claims.

Overall Average Rate Level Change: 6.9 percent decrease.

NCCI also proposed an overall average rate level decrease of 14.3 percent for Federal classifications. These “F-classifications” refer to operations conducted on or about navigable waters for which benefit levels and related costs are determined by the United States Longshore and Harbor Workers’ Compensation Act, rather than individual state laws. Typical F-classifications include those covering ship builders and stevedores.

Please contact us to learn more about the upcoming workers’ compensation rate reduction.

NCCI recommends 6.9% Florida workers’ compensation rate decrease in 2026

Anita Byer

Florida employers may be paying less for workers’ compensation insurance next year. The National Council on Compensation Insurance (NCCI) is recommending an average rate level decrease of 6.9 percent for the voluntary market effective January 1, 2026. NCCI, which is authorized to recommend rates on behalf of workers’ compensation insurers in Florida, submitted its proposed rate reduction to the Florida Office of Insurance Regulation for review. If approved, it will be the ninth consecutive year workers’ compensation rates have gone down in Florida.

The proposed 6.9 percent rate reduction is based on experience data for policy years 2022 and 2023 as of year-end 2024. It also reflects the estimated impact of the Health Care Provider Fee Schedule changes effective January 1, 2026. The rate filing submitted by NCCI notes that the number of claims (frequency) and the cost of claims (severity) continue to be key metrics for the health of the workers’ compensation system. Indeed, improved loss experience resulting from declines in the frequency of lost-time claims during these policy years is identified as the primary driver of NCCI’s proposed rate decrease.

The rate filing notes that the workers’ compensation system in Florida and nationally generally remains healthy. According to NCCI:

The 2024 combined ratio for workers compensation is 86 percent. The combined ratio measures an insurance company’s profitability and financial health. A combined ratio below 100 percent (the break-even point) signifies underwriting profitability.
The frequency of lost-time claims continues its long-term decline across all NCCI states.
Claim frequency declined at a faster pace in 2024 than the long-term average rate of decline, which is seen as an indication of safer workplaces and fewer injured workers.
The severity of medical and wage replacement claims increased in 2024, driven in part by inflationary pressure.
Increased medical costs were primarily driven by the increased utilization of medical services by injured workers. NCCI notes that physician services account for more than 40% of all workers compensation medical services, even though the cost of these services only increased by 1.5% over the past three years.
The increase in indemnity benefits is primarily driven by an increase in wages.

NCCI also recommends extending published rating values from two to three decimal places. According to NCCI, this decimal extension allows for more precise adjustments that will be particularly beneficial for classification codes with lower rates by minimizing rounding limitations that are more likely to impact these class codes. The methodology for determining rates, however, remains unchanged.

Remember, NCCI is recommending a 6.9 percent rate decrease for 2026. Next year’s workers’ compensation premium rates will not be known until the Office of Insurance Regulation issues a final order. State regulators must still analyze NCCI’s data and may request an adjustment to the current recommendation before holding a public hearing.

Navigating Multi-State Workers’ Compensation Coverage: Avoiding Costly Gaps

When purchasing workers’ compensation insurance, employers must consider all states where an employee could be entitled to file a claim. Failing to do so can create significant gaps in coverage, leaving businesses exposed to liability and payment obligations.

The risk of such gaps is particularly high because employees have the right to choose the jurisdiction for their claims based on three key factors:

The state where their work is primarily localized
The state where the injury occurred
The state where they reside

Traditionally, these three factors often pointed to the same state. However, the rise of remote work and evolving workplace environment have created new scenarios, making it more challenging to determine an employee’s primary work location.

How Workers’ Compensation Policies Define Coverage

Workers’ compensation policies only cover claims arising in the states specifically listed in the policy. Each state has unique rules governing coverage and exclusions, making it crucial that policies align with where employees may file claims.

To establish jurisdiction, states generally consider the following:

Is the employee’s work primarily localized in a state listed in the policy?
Where was the employee physically located when accepting the job offer?
Where does the employee live?

For businesses operating in multiple states, determining where an employee’s job is “principally localized” is essential. Most states define this as the location where employees regularly work, reside, or spend a substantial portion of their working time. If this location is not covered by the employer’s policy, a gap in coverage may arise, creating a conflict between what the policy will pay and what the employer may legally owe.

Employer Responsibility Regardless of Coverage

Even if an employer’s policy does not provide coverage for an out-of-state employee, the employer remains responsible for fulfilling workers’ compensation obligations under the laws of each relevant state. Employers must proactively assess their coverage to ensure they are adequately protected and compliant with multi-state regulations.

By carefully evaluating jurisdictional risks and updating their workers’ compensation policies accordingly, employers can mitigate financial exposure and ensure that employees receive the benefits they are entitled to—without unexpected costs falling back on the business.

Can you guess the top 10 OSHA violations for 2023?

By Anita Byer, Setnor Byer Insurance & Risk

The Occupational Safety and Health Administration (OSHA) recently revealed a preliminary list of the most frequently cited safety violations for fiscal year 2023, which ended September 30^th. The announcement, which was made at the 2023 NSC Safety Congress & Expo., is significant because knowing how and why workplace injuries occur puts employers in a better position to develop and implement their own safety and training programs.

This year’s list of most frequently cited safety standards looks a lot like last year’s. In fact, except for a slight change in order, the lists are identical. Fall protection was the most frequently cited violation for the 13^th consecutive year. Here is the complete list.

Fall Protection (General Requirements)
Hazard Communication
Ladders
Scaffolding
Powered Industrial Trucks
Lockout/Tagout
Respiratory Protection
Fall Protection (Training Requirements)
Personal Protective and Lifesaving Equipment (Eye and Face Protection)
Machine Guarding

An employer’s failure to observe safety standards can quickly become an OSHA violation. These can be very costly. The maximum penalty for the following OSHA violations is currently $15,625 per violation, except for willful or repeated violations, which carry a maximum penalty of $156,259 per violation.

WILLFUL: A willful violation is defined as a violation in which the employer either knowingly failed to comply with a legal requirement (purposeful disregard) or acted with plain indifference to employee safety.
SERIOUS: A serious violation exists when the workplace hazard could cause an accident or illness that would most likely result in death or serious physical harm, unless the employer did not know or could not have known of the violation.
REPEATED: A repeated violation occurs when a previously-cited business fails to correct the violation or is cited again for the same or a substantially similar condition.
OTHER-THAN-SERIOUS: A violation that has a direct relationship to job safety and health, but is not serious in nature, is classified as “other-than-serious.”

Workplace safety, for better or worse, begins at the top. Knowing how and why workplace injuries occur puts employers in a better position to prevent them. With an effective workplace safety program, employers can reduce the risk of workplace injuries and may even end up paying less for workers’ compensation insurance.

Please contact us to find out how an effective workplace safety program can reduce the cost of workers’ compensation insurance.

NCCI proposes 15% rate decrease for Florida workers’ compensation insurance in 2024

By Anita Byer, Setnor Byer Insurance & Risk

Florida employers may be paying less for workers’ compensation insurance next year. The National Council on Compensation Insurance (NCCI) is recommending an average 15.1 percent rate level decrease in Florida’s voluntary workers’ compensation market for 2024. NCCI, a rating organization authorized to make rate filings on behalf of workers’ compensation insurance companies in Florida, submitted its proposed rate decrease to the Florida Office of Insurance Regulation for review and approval. If approved, the rate decrease would become effective January 1, 2024.

NCCI’s proposed rate reduction is based on claims experience data for policy years 2020 and 2021, as of year-end 2022. According to NCCI’s rate filing summary, a favorable loss experience has been observed in each of these time periods. This was a primary driver of the proposed 15.1 percent decrease. NCCI also notes that the proposed rate reduction includes additional changes due to recent medical fee schedule updates and higher investment returns expected in today’s interest rate environment.

The favorable conditions prompting the proposed rate decrease in Florida seem to extend nationwide. According to NCCI, the workers compensation system remains healthy.

Lost-time claims relative to premium have returned to their 20-year trend trajectory, declining 4% in the past year.
Employment and wage growth marked a return to pre-pandemic levels.
Recent wage increases are outpacing average claim costs along with continued countrywide declines in total claims.
Payroll, as the exposure base, is inflation-sensitive, so as wages rise, premiums automatically increase along with the cost of associated workers compensation benefits. Consequently, wages, premiums, and indemnity benefits typically stay in balance.

There are, however, some areas of concern. According to NCCI, there was a notable rise in claim costs for 2022. Year over year, medical claim costs increased approximately 5 percent and indemnity claim costs increased approximately 6 percent. Although medical inflation is predicted to increase at a rate of about 3% per year, it remains below the inflation rate of the Consumer Price Index.

Remember, the 15.1 percent rate decrease has only been proposed by NCCI. Florida’s Office of Insurance Regulation must still analyze NCCI’s data and may request an adjustment to the current recommendation before holding a public hearing. Although optimism surrounds NCCI’s recommendation, next year’s workers’ compensation premium rates will not be known until Florida’s Office of Insurance Regulation issues a final order.

Please contact us about paying less for workers’ compensation insurance in 2024.

New OSHA rule means more employers will be required to electronically report injury data

By Anita Byer, Setnor Byer Insurance & Risk

The Occupational Safety and Health Administration recently published a final rule that creates a new injury and illness reporting requirement for employers operating in certain industries. As of January 1, 2024, establishments with 100 or more employees operating in designated high-hazard industries must electronically submit injury and illness information to OSHA once a year. The goal of this new reporting requirement is to reduce the frequency and severity of occupational injuries and illnesses by increasing public awareness and understanding.

Existing OSHA regulations generally require nonexempt employers with more than ten employees in most industries to keep records of occupational injuries and illnesses. This was not changed by the final rule. Covered employers are still required to record information about recordable injuries and illnesses on three separate OSHA forms.

Form 300 (Log of Work-Related Injuries and Illnesses)
Form 300A (Summary of Work-Related Injuries and Illnesses)
Form 301 (Injury and Illness Incident Report)

Some employers, by virtue of their size and industry, are also required to electronically submit injury and illness data to OSHA once a year. Currently, two groups of employers are subject to an electronic submission requirement. When the final rule becomes effective, however, there will be three such groups.

As you will see, these employer groups are determined primarily by the total number of employees working at an establishment during the previous calendar year. This is necessary because OSHA’s recordkeeping regulations require employers to maintain and report injury and illness data at the establishment level. OSHA regulations define an establishment as a single physical location where business is conducted or where services or industrial operations are performed. This makes it possible for a single employer to have multiple “establishments” for purposes of OSHA’s electronic reporting requirements.

Under the final rule, the following groups of establishments will be required to electronically submit injury and illness information from their recordkeeping forms to OSHA once a year.

Establishments with 20-249 employees in certain designated industries will continue to be required to electronically submit information from their Form 300A to OSHA annually. These designated industries are identified by NAICS codes and listed in appendix A to the regulations.
Establishments with 250 or more employees in industries that are required to routinely keep OSHA injury and illness records will continue to be required to electronically submit information from the Form 300A to OSHA annually.
[New Group] Establishments with 100 or more employees in certain designated industries will be subject to a new requirement to electronically submit information from their OSHA Forms 300 and 301 to OSHA once a year. The designated industries for this group are identified by NAICS codes and listed in the newly-created appendix B to the regulations.

Before the final rule goes into effect, employers must determine whether they have an establishment that will be subject to OSHA’s new electronic submission requirement. Does the establishment operate in one of the designated industries listed in the final rule’s new appendix B? Did the establishment have 100 or more employees at any point during the previous calendar year, including full-time, part-time, temporary and seasonal employees? Only those who answered yes to both questions are subject to the final rule’s new electronic submission requirement.

Unfortunately, employers do not have much time left to figure this out. Establishments subject to the final rule must submit all the required information to OSHA by March 2 of the following calendar year. These establishments will have to electronically submit their 2023 injury and illness information to OSHA by March 2, 2024, which will be the first submission deadline under the final rule.

The revised regulations should serve as a reminder for employers of their obligation to provide a safe and healthy workplace. In addition to protecting employees from work-related injuries, employers may benefit financially from lower workers’ compensation insurance premiums.

Please contact us if you would like more information about controlling workers’ compensation insurance costs.

Does workers’ compensation cover employees injured at company-sponsored events?

By Anita Byer, Setnor Byer Insurance & Risk

Company-sponsored social and recreational events have become common in today’s workplace. They can be a great way to recognize achievements, celebrate holidays, strengthen bonds, build moral or just let off some steam. But what happens if an employee is injured while attending a company-sponsored event? Is the injury covered under their employer’s workers’ compensation policy? Well, that depends.

Workers’ compensation insurance generally covers injuries that arise out of and in the course and scope of employment. However, depending on the circumstances, injuries sustained by employees attending company-sponsored social or recreational activities may be covered by workers’ compensation. This determination can be both state- and fact-specific, with each state applying its own interpretation of whether injuries “arise out of and in the course of employment” when they occur at a company-sponsored social or recreational event.

In Florida, for example, “recreational or social activities are not compensable unless such recreational or social activities are an expressly required incident of employment and produce a substantial direct benefit to the employer beyond improvement in employee health and morale that is common to all kinds of recreation and social life.” Under this standard, issues of compensability often turn on whether the employee’s attendance at the company-sponsored event was truly voluntary.

An injury sustained at a company-sponsored event will likely be deemed employment-related (and covered by workers’ compensation) if attendance is mandatory. Attendance at a “voluntary” event may also be considered mandatory if employees feel forced to attend. A company-sponsored event is not truly voluntary if attendees are rewarded or absentees are punished.

It should also be noted that the employer need not actually “host” the event for liability to be imposed. For example, if employees are required to attend an event sponsored by a customer, they are likely covered by workers’ compensation because the employer made attendance mandatory hoping to benefit from the goodwill generated by the staff toward the customer.

Generally, employer-sponsored picnics, sports events, recreational leagues, and company retreats are meant to foster team building, inspire loyalty, and boost employee morale. Such events are usually well-received by employees and may serve as a reward for hard work. However, employers would be wise to consider the potential risks involved when planning these events. To minimize exposure, employers should:

make clear to employees that attendance and participation are not mandatory; and
when possible, plan events away from the company premises and on weekends to emphasize that such events are social and not work-related.

When these and other appropriate risk-management measures are taken, employers can maximize the benefits of company-sponsored while minimizing the risk of compensable workers’ compensation claims. Please contact us if you have questions about Worker’s Compensation and Employers Liability Insurance Coverage.

Florida approves 8.4% workers’ compensation rate reduction for 2023

By Anita Byer, Setnor Byer Insurance & Risk

Florida employers will be paying less for workers’ compensation insurance in 2023. The Florida Office of Insurance Regulation approved an overall average statewide decrease of 8.4 percent in workers’ compensation insurance premiums. The rate decrease will apply to new and renewal policies beginning January 1, 2023. This is the seventh consecutive year workers’ compensation rates have gone down in Florida.

The 8.4 percent rate reduction was initially proposed by the National Council on Compensation Insurance (NCCI), a rating organization authorized to make rate filings on behalf of workers’ compensation insurance companies in Florida. The reduction was based on NCCI’s analysis of claims experience data for the 2019 and 2020 policy years as of year-end 2021. According to NCCI:

favorable claims experience has been observed during these time periods;
Florida’s frequency of lost-time claims (injured employee receives wage replacement benefits) has generally declined over the most recent eight years; and
Florida’s average indemnity cost per case have been relatively consistent over time, while those for medical have been slightly more volatile from year-to-year.

NCCI notes that the rate reduction not influenced by the pandemic as its analysis did not include COVID-19 claims data. Nevertheless, NCCI’s assessment of possible pandemic-related impacts revealed that:

most COVID-19 claims are medical-only or indemnity-only and continue to be small (less than $1,500);
large claims (over $100,000) account for fewer than 2% of all COVID-19 claims, but more than 60% of total COVID-19 losses;
most claimants were employed in the healthcare industry;
the average age of workers with large claims is 55, which is 8-10 years older than that those with non-COVID claims; and
COVID-19 claims decreased significantly in 2021.

Although rates are going down next year, NCCI cautions that inflation has the potential to negatively influence the workers’ compensation system nationwide. Wage inflation is a concern as many workers, particularly those in leisure and hospitality, have seen significant pay increases recently. This directly impacts the cost of workers’ compensation insurance because payroll is used as the base to calculate premium. Rising medical claim costs (medical inflation) can also lead to higher premiums.

Florida employers may be paying less for workers’ compensation in 2023

By Anita Byer, Setnor Byer Insurance & Risk

Florida employers may be paying less for workers’ compensation insurance in 2023. The National Council on Compensation Insurance (NCCI) is recommending an overall average rate level decrease of 8.4 percent for next year. The proposed rate reduction filed with Florida’s Office of Insurance Regulation (OIR) would apply to new and renewal workers’ compensation policies in the voluntary market beginning January 1, 2023. If the OIR approves a rate reduction, it would be the seventh consecutive year workers’ compensation rates have gone down in Florida.

NCCI’s recommended rate reduction is based on claims experience data for the 2019 and 2020 policy years as of year-end 2021. According to NCCI:

favorable claims experience has been observed during these time periods;
Florida’s frequency of lost-time claims (injured employee receives wage replacement benefits) has generally declined over the most recent eight years; and
Florida’s average indemnity cost per case have been relatively consistent over time, while those for medical have been slightly more volatile from year-to-year.

NCCI’s recommendation was not influenced by the pandemic as its analysis did not include COVID-19 claims data. Nevertheless, NCCI’s assessment of possible pandemic-related impacts revealed that:

most COVID-19 claims are medical-only or indemnity-only and continue to be small (less than $1,500);
large claims (over $100,000) account for fewer than 2% of all COVID-19 claims, but more than 60% of total COVID-19 losses;
most claimants were employed in the healthcare industry;
the average age of workers with large claims is 55, which is 8-10 years older than that those with non-COVID claims; and
COVID-19 claims decreased significantly in 2021.

Despite recommending a rate reduction, NCCI cautions that inflation has the potential to influence the workers’ compensation system nationwide. Wage inflation is a concern as many workers, particularly those in leisure and hospitality, have seen significant pay increases recently. This directly impacts the cost of workers’ compensation insurance because payroll is used as the base to calculate premium. Rising medical claim costs (medical inflation) can also lead to higher premiums.

Remember, NCCI is only recommending an overall average rate level decrease of 8.4 percent in 2023. Florida’s Office of Insurance Regulation will analyze NCCI’s data and may request an adjustment to the current recommendation before holding a public hearing. Although optimism surrounds NCCI’s recommendation, next year’s workers’ compensation premium rates will not be known until Florida’s Office of Insurance Regulation issues a final order.

Please contact us about paying less for workers’ compensation insurance in 2023.

Risk of workplace injuries higher among first-year employees

By Anita Byer, Setnor Byer Insurance & Risk

Did you know that the risk of workplace injuries is higher among first-year employees? A recent analysis of workers’ compensation claims by Travelers revealed that an employee’s first year on the job is often the most dangerous. Thirty-five percent of workplace injuries occurred during an employee’s first year. Thirty-seven percent of all workdays missed due to injury were taken by first-year employees. This obviously isn’t welcome news, but the resulting awareness is crucial to reversing this disturbing trend. Now, employers know to implement additional safety policies and procedures designed to reduce the risk of injury among first-year employees.

The first step to developing an effective safety program is to identify the most common causes of workplace injuries. According to Travelers’ analysis of more than 1.5 million workers’ compensation claims, the most common causes of first-year injuries were:

Overexertion (27%)
Slips, trips and falls (22%)
Struck by an object (14%)
Cuts and punctures (6%)
Caught-in or -between hazards (6%)
Motor vehicle accidents (6%)

The most common injuries suffered by first-year employees were:

Strains and sprains (38%)
Fractures (13%)
Contusions (95)
Cuts and puncture wounds (6%)
Inflammation (6%)
Dislocations (6%)

Though workplace injuries can and do happen anywhere and everywhere, the heightened risk of injury to first-year employees is more pronounced in specific industries. According to Travelers, the industries most affected by first-year injuries were:

Restaurants (53% of claims and 47% of claim costs)
Construction (48% of claims and 52% of claim costs)
Services (43% of claims and 38% of claim costs)
Transportation (39% of claims and 41% of claim costs)

Employers can do a number of things to reduce the risk of injury among first-year employees. Integrating safety into the hiring process, for example, makes employees aware of the risks and the organization’s emphasis on workplace safety. Employers can also perform a job-safety analysis or implement an accident analysis program to better understand the risks associated with specific jobs and tasks. The kinds of preventative measures may vary depending on the circumstances, but every workplace safety program must include regular safety training for all employees, beginning day one.

Please contact us to find out how an effective workplace safety program can reduce the cost of workers’ compensation insurance.