The Florida legislature adjourned this week. Lawmakers could not reach agreement on several bills affecting the risk and insurance industry, including high-profile measures aimed at workers' compensation reform. The Florida Workers' Compensation Act has been at forefront in the Sunshine State since last spring, when the Florida Supreme Court ruled two parts of the system involving indemnity rates and attorneys' fees unconstitutional. Those rulings resulted in a 14.5 percent increase in workers’ compensation insurance rates, which a Florida appellate court this upheld this week.
The two chambers of the Florida legislature made final efforts to reach consensus last week on maximum fee rates for applicant's attorneys. The House proposed a cap of $150 an hour, while the Senate proposed $250 an hour. In the final hours, lawmakers in the House raised the bid to $180 per hour, but the Senate adjourned without considering it. Along with the fee issues, senators also resisted House proposals to cut reimbursements to hospitals that provide outpatient treatment to injured workers.
PIP AND PROPERTY
While workers' compensation was the main attraction in Tallahassee, there were two other noteworthy risk and insurance issues that failed this session. Lawmakers in the state senate did not move forward with the state house's proposal to eliminate the state's personal injury (PIP) protection and no-fault auto insurance system. The measure would have saved every vehicle owner in Florida $81 or a collective savings of more than a billion dollars annually. The legislature adjourned without addressing an emerging issue in property damage litigation known as "assignment of benefits," which advocates say continues to drive up homeowners' rates.
And lastly, the legislature was unable to pass legislation responsive Florida's referenda vote in favor of Amendment 2, a measure to legislate and expand medical marijuana dispensaries throughout the state. At this point, the legislature will leave the task or regulating the potential billion dollar industry to the Florida Department of Health. We will continue to track the impact of these legislative results throughout the year.
HEALTH CARE & ADDICTION SERVICES
The U.S. House of Representatives narrowly approved GOP-backed legislation this week to repeal and replace major parts of the Affordable Care Act, moving one step closer to the party's election year commitments to reshape American health care. We are tracking the bill's progress, in large part because of the energy and attention it has drawn in the Congress, but in no small part because of several proposals in the bill that may have significant adverse effects on opioid addiction programs in the United States. Advocates for addiction services across the U.S. assert that the administration's plans to cut funding to the National Drug Control Policy Office would be "devastating."
FINANCIAL RISK MANAGEMENT
On Thursday, the House Financial Services Committee approved the a GOP-backed repeal of financial oversight legislation, moving the administration one step closer to its long-stated goal of repealing the Dodd-Frank Act. The Creating Hope and Opportunity for Investors, Consumers, and Entrepreneurs (The CHOICE Act) will now go before the full House of Representatives for a vote. The bill would eliminate Title II of Dodd-Frank, the section that created the Orderly Liquidation Provision, and would provide a government guided wind-down process for banks facing bankruptcy. In its place, the proposal would create a new section of the bankruptcy code specifically targeted at large financial institutions. In addition, the CHOICE Act would do away with Title IV of Dodd-Frank, which gives the Financial Stability Oversight Council (FSOC) the ability to designate financial organizations, including the country's major insurers, as systemically important institutions susceptible to heightened levels of rulemaking and regulatory action.
Making Our Way Around The Country
Nebraska Governor Pete Ricketts signed into law Legislative Bill 444, a measure that will now allow Department of Correctional Services and Department of Health and Human Services employees that work with high-risk individuals to file workers' compensation claims for mental ailments. Previously, the state's first responders were the only group of frontline state employees who could file claims for mental injuries without physical components.
Governor Terry Branstad signed into law medical malpractice reform. The new state law sets a $250,000 limit on non-economic damages for emotional pain and suffering that are awarded when health care providers are found liable for medical negligence. However, the limit will not apply if a patient dies, loses major bodily functions or is substantially disfigured. Governor Branstad has long sought this legislation in order to attract and retain physicians and medical talent in the Hawkeye State.
The Colorado legislature passed HB17-1279, a bipartisan effort to address the state's construction defect laws. The bill requires that, before the executive board of a Homeowners Association (HOA) sues a developer or builder, the board must first notify all unit owners and the developer or builder. The HOA must call a meeting at which the executive board and the developer or builder will have an opportunity to present relevant facts and arguments. Last, the HOA must obtain the approval of a majority of the unit owners after giving them detailed disclosures about the lawsuit and its potential costs and benefits. Supporters of the bill hope this change will help drive homebuilding to keep pace with state's rising new building demand.
Last week, the Maine Supreme Court granted a petition to review Bourgoin v. Twin Rivers Paper Co. and Noll v. Lepage Bakeries, two cases where the appellate court upheld administrative orders for reimbursement medical marijuana expenses. Briefing before the court is set to be completed by July 3rd. Since the 2014 appellate rulings in New Mexico, reviewing courts in Minnesota, Connecticut, Massachusetts, Maine and New Jersey have approved lower court orders compelling employers and carriers to reimburse for medicinal marijuana in workers' compensation claims.
SECOND SUNDAY IN MAY
Tuesday marked the 103rd anniversary of President Woodrow Wilson's proclamation establishing the second Sunday in May as a day to honor the nation's hardest working labor force. This Sunday, stop and thank all moms working hard in the home, advocating for families across all workplaces, or helping lead our industry right here at The Way. Happy Mother's Day!
About The Way
The Way is Gallagher Bassett's weekly governmental briefing on state and federal affairs that affect our industry. We thank you for starting your Wednesday morning with us. Please be sure to follow #GBTheWay for additional news and updates as we make our way throughout the country on the issues affecting our industry. For more information, please connect with GB on LinkedIn, follow us on Twitter, or contact the authors, Greg McKenna or Cari Miller, directly.