Counting Down to 2015

Can you believe it?  Only three days left in 2014.  If your home is like ours, we’re in the process of taking down the holiday decorations, finishing up the leftovers from holiday meals, writing thank you notes and starting to organize ourselves for 2015.  Yes, we set those long and short term goals during the last week of each year and make serious plans to meet each and every one of them.  And we are successful on many of them by the end of the new year, less than successful on some of them, and roll a few over to try again for the next year.  We like starting again with each New Year’s beginning because it feels good and helps us become absolutely energized and ready to go!  With our first publication of 2015, we’ll share some of those goals we have for making the state of Florida THE place to live and grow on-going and new businesses.  We invite you to share some of your plans and thoughts with us as we continue team work. While the holiday season has brought a respite from the fast-paced daily grind of business, a few important events have occurred and we are sharing them with you in this our last publication of 2014.

DFS Adopts Workers’ Compensation Hospital Reimbursement Manual

The Florida Department of Financial Services, Division of Workers’ Compensation (DWC) has adopted the Florida Workers’ Compensation Reimbursement Manual for Hospitals rule (Rule Chapter 69L-7.501, Florida Administrative Code). The purpose and effect of the rule change is to adopt the 2014 edition of the manual for hospitals, replacing the 2006 edition currently spoken to in existing rule. The revised rule has an effective date of Thursday, January 1, 2015. In 2005, when I served as the Department of Financial Services’ Chief of Staff, there was a raging debate on how hospitals were reimbursed for services they rendered to injured workers. On one side, the hospitals felt like they were adequately compensated because the law and rule provided a loose framework for hospital charge reimbursement. On the other hand, insurers were incensed that hospitals’ charges for workers’ compensation services were unjustified and were (and still are) convinced that it shouldn’t cost a lot more to treat a workers’ comp patient than what it costs to treat a Medicare patient. It’s been longer than ten years that this debate has continued with the Division of Workers’ Compensation releasing a hospital reimbursement rule draft and the hospitals challenging its reimbursement methodology over the decade. After much anticipation and a long journey down a rocky road with proposed rules and subsequent rule challenges, the DWC and the hospitals have reached a compromise agreement regarding the methodology for hospital reimbursements. There have been a half dozen rule versions released and in all cases, they have been withdrawn/taken out of circulation because the hospitals have objected to changing the status quo. This past quarter, the DWC and the hospitals came to an agreement that test-drive a new reimbursement methodology using usual and customary charges from certain geographic regions. Some stakeholders are saying that as the hospitals in the geographic areas learn the system, they can simply increase their charges and the “geographic average” will increase, which is in essence preserving the status quo. Many of these same stakeholders want a clear law change to put a limit on what hospitals charge, however, that was attempted during the 2014 Legislative Session but summarily died in a committee meeting.  While the statutory language has not changed, it is anticipated the new methodology promulgated by rule will provide some savings to the employer/carrier community and thus to the system as a whole. If you are interested in more details regarding the rule and manual you may access them HERE and HERE.

Workers’ Compensation Statewide Average Weekly Wage Set

The Florida Department of Economic Opportunity has determined the statewide average weekly wage (AWW) paid by employers subject to the Florida Reemployment Assistance Program Law to be $841.57 for the four calendar quarters ending June 30, 2014. Section 440.12(2), Florida Statutes (2014), expressly provides that, “for injuries occurring on or after August 1, 1979, the weekly compensation rate shall be equal to 100 percent of the statewide average weekly wage, adjusted to the nearest dollar, and that the average weekly wage determined by the Agency for Workforce Innovation for the four calendar quarters ending each June 30th shall be used in determining the maximum weekly compensation rate with respect to injuries occurring in the calendar year immediately following.” Accordingly, the maximum weekly compensation rate for work-related injuries and illnesses occurring on or after January 1, 2015 shall be $842.00. The AWW is a critical number when insurers are calculating workers’ compensation claim indemnity payments inasmuch as the claim amount paid starts with the average of 13 weeks of an employee’s payroll and further adjusted according to the average weekly wage set above. If you are interested in obtaining more information regarding the new rate, you can access the informational bulletin by clicking HERE.

Florida Commission on Hurricane Loss Projection

Methodology Holds Quarterly Meeting

LMA was there in person when the Commission held its last quarterly meeting of 2014 on December 16.  It was a full -day agenda, however, the main focus was on flood standards development.  You know we’ve been in the middle of the mix to bring insurers to Florida and encourage current Florida insurers to write direct flood insurance for property owners. We all know that an important key to providing flood coverage is having good statistics for ratemaking and projecting losses, as required by the Office of Insurance Regulation. This is a challenge for Florida and other states since the majority of loss costs and ratemaking methodology flood stats sit in the vaults of the National Flood Insurance Program. There are ongoing discussions with NFIP to obtain the data. But the work goes on and in fact, during the Flood Standards Development Committee within the Commission there was much discussion on the resolutions to outstanding issues of the working draft of General Flood Standards and the working draft Meteorological/Hydrological Flood Standards. Much of the discussion regarding the Meteorological/Hydrological Flood Standards focused on the nature of the peril (flood) and several issues identified by the modeling organizations, i.e., the availability of data and avoiding prescriptive language. The Committee agreed to incorporate the suggested changes received from modeling organizations and to prepare a “clean” document to work/edit from at the next meeting. The committee closed its meeting with an agreement to address the issue of storm surge and wind losses in the hurricane models during the review and edit of the hurricane standards and a request to have some “flood experts” provide tutorials at the January 2015 meeting.  If you are interested in taking a look at the edits made to the general flood standards at the December meeting, click HERE.

It’s Crunch Time Again for Purchasing Health Coverage Through Obamacare

Midnight Monday, December 15 (PST) was the deadline for new customers to select a health insurance plan through the federal Affordable Care Act (ACA) that will provide coverage beginning Jan. 1, and for current enrollees to make changes that could reduce premium increases ahead of the new year. All is not lost, however, because the actual open enrollment period for ACA coverage began on November 15 and runs to February 15, 2015. Currently, around 6.7 million US residents have coverage through the ACA, which provides subsidized private health insurance. The administration’s objective is to increase the number of enrollees in 2015 to approximately 9.1 million people. To accomplish this objective the program will need to keep the majority of current enrollees while enrolling around 2 million new insureds. Around the end of the first week of December telephone hold times at the ACA call center began increasing due to approaching deadlines and questions from existing enrollees regarding coverage for 2015.  When renewing for 2015 coverage, many of the current (2014) enrollees are facing  premium increases in the mid-to-high single digits and much more in certain situations.

Although consumers can no longer be turned away because of underlying health conditions, the entire process of reviewing, comparing and electing a particular health coverage plan or renewal plan remains confusing for many. What also can complicate ACA decisions for consumers is the added requirement of navigating the process of applying and qualifying for federal subsidies to offset premium costs. Unfortunately, based on current data it appears that the majority of 2014 enrollees intend to do nothing during the open enrollment period and will be automatically renewed effective January 1 in the plan they are in currently. People who renew by default, however, will likely get locked into a premium increase and not have access to lower-priced plans available in 2015. Further, these automatically renewed insureds will keep their 2014 premium subsidies, which may be less than those they could be eligible for in 2015. Further, those enrollees who turned 21 years of age this past year and end up renewing by default for 2015 may see the most severe impact. Research data indicates that 21 year-olds will see an approximate premium increase of 58 percent simply because they are now one year older.  Applying 2015 tax -credit subsidies can neutralize much, if not all of the the significant premium increases; however, if 21 year-olds renew coverage by default their tax credits will remain the same as in 2014. LMA will continue monitoring issues which crop up during the ACA open enrollment period and bring you updates regarding their impact.

Drowsy Drivers Involved in 20% of Fatal Crashes-STAY ALERT, AWAKE, & AWARE

Wow…we couldn’t believe this statistic when we read it and then again, haven’t we all experienced that “I’m so tired, but I have to make this trip” conversation with ourselves or even worse, “Oh my goodness, did I really just doze off?”  It’s a scary feeling and an even more foreboding thought that we could be the cause of someone’s injury or death.  The study we read recently by the American Automobile Association Foundation for Traffic Safety showed 21% of all fatal car crashes involved a drowsy driver; 37% with reports of falling asleep behind the wheel at some point in their lives; and, 11% reports of falling asleep behind the wheel in the past year. This study entitled, “Prevalence of Motor Vehicle Crashes Involving Drowsy Drivers, United States, 2009-2013,” highlights the serious consequences of drowsy driving. The data was taken from 25,528 drivers involved in 14,268 crashes from 2009-2013 in which a vehicle was towed from the scene. Of all crashes, 6% involved a drowsy driver, and the percentage grows as the accidents get more serious. The study found that 7% of crashes that resulted in any injury and 13% of those that resulted in severe injury involved drowsy drivers. And, according to AAA, most drivers drift out of their lanes or off the road, and drivers themselves are often crash victims who die in single-car crashes.  Yes, we sure do live in a fast-paced world and we are always trying to get somewhere quickly.  These stats certainly scream WAKE UP to us at LMA and we are making it an absolutely must-do new year’s resolution to make sure we are alert, awake, and aware when we get behind that steering wheel. We hope you will join us in this commitment and for sure have a designated driver if the party on New Year’s Eve is just way fun!

Out With the Old and In With the New

As we mentioned in our opening article, we LOVE welcoming in a new year!  It just feels good to start fresh in January each year.  We have so much planned and of course, are super excited about the upcoming 2015 Legislative Session.  Look for some real goodies in our January 12 newsletter publication that will help you do your planning for the Session, starting with legislative committee schedules, as well as some great sites to keep you in the “real time know” on what is moving and shaking in our capital city.  As we close 2014, let us again tell you how very important you are to us both personally and professionally.  LMA is a family no doubt and you help make it a family to be proud of.  See you next year!

Lisa and the LMA Team