How Florida Screws Over Employers Who Have Been Overcharged for Workers Comp Insurance

 The state of Florida have a (to my knowledge) unique no-win scenario that handicaps Florida employers who have been overcharged on their Workers Compensation insurance. If the employer declines to pay a Workers Comp insurance bill because the employer feels it is excessive and incorrect, and the insurer files suit against the employer, existing case law in Florida mandates that the employer cannot raise the issue of the insurance company miscalculating the premiums---unless the employer had earlier attempted to dispute the overcharges by going through the Florida administrative appeal process.

Now, I'm not an attorney, so keep that in mind when I write about matters involving legal issues. But I often serve as an expert witness in litigation over Workers Compensation insurance premiums, so I have recently had the opportunity to witness a Florida court making exactly such a determination.

Every state has some kind of administrative appeal system for Workers Compensation insurance. Usually employers have an extremely limited awareness of the existence of such an appeal process. But in Florida, if the employer doesn't attempt to use that administrative appeal process BEFORE THE INSURANCE COMPANY FILES SUIT OVER THE PREMIUMS the employer cannot raise the issue of any errors by the insurance company in computing premiums, no matter how egregious and excessive those overcharges are.

In my own view, understandably, this is a disastrous situation for employers in Florida, as overcharges in Workers Compensation insurance premiums are far from uncommon. So these precedents in Florida case law essentially give insurance companies carte blanche to overcharge employers on Workers Comp insurance, as long as the insurer can get to the courthouse before the employer realizes there even exists an administrative appeal process.

My only advice for Florida employers is to be keenly aware of this situation and to be aware of the administrative appeal process. As Florida is an NCCI state, this means for most (but not all) disputes over Workers Compensation insurance premiums, the administrative appeal process would involve the Workers Compensation Appeal Board jointly administered by NCCI and the Florida insurance regulators. But NCCI appeal boards are limited in the kinds of technical issues they can hear. Typically, NCCI appeal boards can hear disputes over classifications, experience modification factors, payroll audits, and other NCCI manual rules. 

But for other issues that can sometimes arise over Workers Comp premiums, including application of state statutes, NCCI appeal boards cannot provide relief. Those would have to be filed with the Florida insurance regulators, the Florida Office of Insurance Regulation.

And employers in Florida should make sure to reach out to those appeal mechanisms as soon as there is any dispute over Workers Comp premiums, lest their insurance company close the door on such administrative remedies by filing suit. Once suit is filed, administrative remedies cannot be sought and thus the employer is, to use a technical term, SOL.