Great news for Florida employers! The Office of Insurance Regulation approved a statewide overall workers’ compensation rate level decrease of 13.8 percent for new and renewal policies starting January 1, 2019. This will be the second consecutive year that rates have gone down in Florida.
The rate decrease is due in part to declines in claim frequency resulting from safer workplaces, enhanced workplace efficiencies and an increased use of automation and innovative technologies. Reduced assessments and increased investment income also contributed to the rate decrease.
When combined with the 9.5 percent reduction that took effect January 1, 2018, Florida’s overall rate level will be nearly 25 percent lower in 2019. To offset this revenue loss, insurance companies may begin auditing employers to make sure employees have been assigned the correct job classification code.
Classification codes are used to categorize employees based on the type of work they do. Each code is assigned a rate that reflects the relative risk associated with that type of work. A higher risk means a higher rate, which ultimately means a higher premium.
A car dealership, for example, may have employees classified as salespersons. This may change if an audit reveals that these ‘salespersons’ also work in the dealership’s parts department. The rate used to calculate premiums for non-salesperson employees is nearly five time higher.
It’s unclear how aggressive insurance companies may be in conducting audits, but it’s something employers should be aware of. Please contact us if you have any questions about employee classification codes or want to discuss ways to lower your workers’ compensation insurance premiums.