LMA Newsletter Nov. 28, 2016



 2016-17 Legislative Session

Interim Committee Meeting Schedule



Tallahassee’s New Meeting Place!
We now have The Conference Room available for rental for all kinds of events.  Co-located with the offices of Lisa Miller & Associates, The Conference Room is an affordable and convenient venue for business, political or social events.


You can see photos and details on our website at http://lisamillerassociates.com/the-conference-room.  For more information, contact Roberta Courtney-Bailey at 850-222-1041, or via email at [email protected].  And feel free to come by and take a look!


 Legislative Member Orientations
I had the privilege of attending Senate orientation in the capitol on Tuesday, November 15.  LMA was the only firm in the room.  As these orientations were not televised on public TV, we felt it was important to meet these newly elected members one on one to congratulate them and thank them for their service.  A majority of the senators served in the House and “promoted” to the senate, so we have had the privilege of knowing all of the “new” senators and have worked with most in one capacity or another.  Almost every one of them, with the exception of two, have had direct influence on the insurance industry and an impact on  sound insurance and other public policy.  Senate President Joe Negron opened the Senate orientation with some inspiring words and his major theme was that there is no more important qualification to be an elected official than one’s word.  He talked about how someone might catch a senator in the hallway and talk briefly about an amendment or the elected official’s position on a piece of legislation and the elected official may say, “that sounds good”, and then after study, the member may change his/her mind.  Senate President Negron encouraged the senators to take the time to reconnect with the member of the public or lobbyist to ensure they communicate the change of heart. It was very refreshing to hear this kind of discussion. As you know, LMA’s work and long experience in this process spans over 30 years and we know that integrity of the legislative process, or in any business for that matter, is really a fundamental of success.

Several senators asked questions of CFO Jeff Atwater who did a presentation on Florida’s fiscal discipline, showing that Florida is the 6th strongest economy in the nation.  Florida, Texas, North Carolina and a handful of others have had strict fiscal discipline, and for the next few years we will have financial challenges because, even in Florida, we attempt to spend more as a state than we collect.  There were lots of good folks in that room and I was honored to be among some very bright state senate leaders.

I left the Senate orientation and attempted to attend the House of Representatives new member orientation, but the experience was quite different because the press and outsiders were barred from attending.  Perhaps the refusal of House leadership to allow outsiders to listen to the speakers at the orientation won’t be indicative of the legislative process in the 2017 and 2018 session.  And with that, let’s share some great stories with you this edition.


Affordable Care Act Impacts On Workers’ Compensation Insurance Coverage 
A big question mark going into 2017 is whether the federal Affordable Care Act in its current form will continue to exist.  President-elect Trump and Republican leaders in Congress have vowed to eliminate and replace the healthcare program.   Prior to this month’s election, National Council of Compensation Insurers (NCCI) published a research brief Impacts of the Affordable Care Act on Worker’s Compensation.

Although the Affordable Care Act doesn’t directly address workers’ compensation issues, it was generally anticipated it would have a positive impact.   ACA’s emphasis on greater access to healthcare meant that overall, employees would be healthier, leading to a reduction in workers’ comp claims caused or aggravated by previously hidden conditions.  And because those employees are healthier from the start, their recovery time would be shorter, reducing workers’ comp costs.  That was the theory at least.

ACA also provides reduced health insurance rates for employers who implement a wellness program at work – especially geared toward obesity – so it was reasoned that employees’ improved health and lifestyles would help avoid workplace injuries.   The only anticipated downside was fear that greater competition for a limited supply of primary care physicians would create delays in providing proper workers’ comp care.

The NCCI brief shows ACA has had no discernable impact on crowding out workers’ comp claimants from access to primary care services, at least through 2014, ACA’s first full year.  NCCI also quantified that during the first 90 days of a workers’ comp claim, 68% of primary care services occurred during the claim’s first 10 days.  As for reducing obesity, an NCCI-created “optimistic scenario” where ACA would reduce the US obesity rate from 35% to 25% would imply workers’ comp medical costs could be reduced by 3% to 4%.    As with many things ACA, more time and experience will be required to produce definitive impacts, trends, and outcomes.


Court Halts Workers’ Comp Rate Hike as Impacts Felt in Florida
In the six months since the Florida Supreme Court ruled that limiting attorney fees in workers’ compensation cases was unconstitutional, the average claimant attorney fee has gone up 22% in Florida.  Total claimant attorney fees have increased 27%, as outlined in the NCCI-provided charts below.   In April, the court ruled that Florida’s mandatory attorney fees schedule was a violation of due process after the claimant attorney complained his average fees amounted to $1.53 per hour.  (The issue arose after a disputed $800 medical bill filed by Mr. Castellanos against his employer Next Door Co. and its insurer, Amerisure.  Can you hear Cher’s If I Could Turn Back Time playing in the background?)

The ruling was also the basis for the 14.5% rate increase the Office of Insurance Regulation (OIR) recently granted to NCCI and its 250 workers’ comp writers in Florida for new and renewal policies, with further rate increases likely.  A 38%-40% rate increase is talked about based on what happened pre-2003 reform and the latest trends.   The rate increase was put on hold last week, when a Leon County Circuit judge ruled that NCCI failed to hold public meetings as required by state law when it was developing its rate request and also held non-noticed meetings with OIR staff to discuss the proposed increases.  NCCI said it will appeal the ruling.

The number of claimant attorney fee awards for the period May through September increased by 5% compared to the same period last year.  A second state Supreme Court ruling said a coverage gap can exist between the two year mark when payments to injured workers end and when a doctor formally declares the worker isn’t likely to improve with further treatment. The court recommended payments continue through five years.

Florida lawmakers are expected to take up the matter this upcoming session in answer to Justice Fred Lewis’ call in the Castellanos court case for the legislature to fix what he called a “fundamentally unconstitutional” system.  Florida enacted the current law in 2003 to stem years of double-digit rate increases.

The question now: does the legislature deal with only the attorney fees issue or the fees plus medical expenses issue?  Some defense counsel believe we should be working on attorney fees first and foremost, but that prescription costs and referral (doctor to doctor) costs should be looked at, too.  Only three legislators (out of 160 members total) have experience with workers’ comp.  Inaction is the worst thing that could happen in the 2017 session.

One prominent attorney who has worked in this field for decades recently shared that we have a very good workers’ comp system in Florida, where similar to property insurance customers, 90% of workers are happy and don’t file suits.  It’s the 10% that get lawyers and file suits, some of which are abusive and unjustified, that are creating these issues.  We believe that when you see the consequences of workers’ c omp, it is bound to have a negative effect on job creation and attracting new business to Florida.


Florida Supreme Court Says No More “Free Homes” in Foreclosure
Last week, the Florida Supreme Court ruled that lenders can resume foreclosing at any time reversing the current practice of having to act within five years of when the borrower first defaulted. The ruling is a blow to thousands of delinquent borrowers who hoped that their cases would be permanently dismissed and that the banks could no longer collect on the outstanding mortgage debt.

Proponents of the decision said that it effectively removes the unfair notion that people can live in a home for free after an extended period of time and can clear out the backlog of cases.  Had the court ruled differently (in favor of borrowers), it would have wiped out as much as $400 million in real estate-related debt obligations on the books of Florida banks.

Even those who opposed the ruling acknowledged the ruling was not unexpected, blaming the courts as being pro-business and anti-consumer. The case involved a $650,000 mortgage on a Ponte Vedra Beach home, delinquent since the early 2000s. At the heart of the case was the issue of “mortgage acceleration.” Most mortgages have an acceleration clause that allows the lender to sue for the entire loan amount immediately, starting a five-year clock on the foreclosure process. The 5th District ruled that the dismissal of U.S. Bank’s lawsuit in 2011 negated the original 2006 acceleration date and reset it to 2011, giving the bank more time to foreclose and the high court agreed.  They said the statute of limitations for banks to file a foreclosure suit resets each month that the borrower defaults on a mortgage payment. That means a bank can file suit more than five years after the borrower first defaulted. It also means borrowers can’t stay in their homes forever without paying.

If it speeds up foreclosures, the ruling is likely to help Florida homeowner associations. After the housing crash, thousands of unit owners defaulted on their dues. Associations had to take over the properties and maintain them or try to rent them out while waiting for the banks to foreclose.  Businesses offering this rental service secure temporary title to homes by bidding just high enough to pay off the delinquent dues, often only a few thousand dollars. Then they rent out the homes for months or even years until the banks foreclosed, but this practice is being investigated by Florida’s Attorney General’s Office.


The Real Challenge of Medical Marijuana Now Begins 
Now that a broader use of medical marijuana is the law of the land in Florida, it now falls to Florida’s legislature to figure out the details of just how to accomplish that.  This past Election Day, 71% of voters approved state constitutional Amendment 2 expanding current use of full-strength marijuana by the terminally ill to now include patients with “debilitating conditions.”   As we’ve previously reported, those conditions include cancer, epilepsy, glaucoma, HIV/AIDS, and other maladies that a physician feels using medical marijuana would outweigh the potential health risks for a patient.  Florida currently has two sets of laws on the books – one that allows low-THC “euphoric-free” pot for patients with some of those conditions – and the other which allows the potent pot only for the terminally ill.  Six nurseries are growing, processing, and distributing marijuana under the existing two programs.   The legislature must now decide this coming spring whether to leave the current regulatory infrastructure in place to handle the expansion or create a new set of laws and procedures, possibly expanding production beyond the six current authorized growers.

Senator Jeff Brandes (R-Pinellas) is drafting a bill that would eliminate the two existing programs and create a comprehensive system in its place to allow more entities to grow, process and sell the product.  Brandes has been a dedicated advocate for medical marijuana and says he favors a free market system in Florida.

The legislature faces several obstacles.  The state Department of Health and growers continue to fight in court over who is allowed to grow and sell the low-THC version of the drug.  Opponents of the amendment, fearing abuse, are urging the legislature to limit THC levels, ban candy-like products, and tighten eligibility for “debilitating conditions.”  Also, in reaction to passage, several local governments across Florida including Miami Beach, Boca Raton, and Delray Beach either have or are drafting ordinances to limit or ban medical marijuana production and/or distribution within their city limits.

In honor of Dinah Miller, Lisa Miller’s angel dog who suffered from epilepsy, we are following this legislation to ensure research availability to explore medical marijuana therapy for animal seizure sufferers.


  Future Automated Vehicle Regulation Discussed 
Dr. Mark Rosekind, Administrator of the National Highway Traffic Safety Administration (NHTSA), said he envisions a world with fully automated vehicles to completely eliminate traffic deaths.  Rep. Michael Burgess (R-TX) said self-driving cars promise to be the most significant safety development in our lifetimes.  The comments were made at two hearings this month on Capitol Hill with major stakeholders addressing the future regulation of Automated Vehicles, including cybersecurity and the role of insurance.

Today’s crash avoidance and various driver assistance technologies are building blocks to the full driving automation of tomorrow. The Alliance of Automobile Manufacturers has pointed out that while self-driving cars will be possible in just a few years, full transition will likely take several decades.

Ironically, these hearings come at a time of increasing death on America’s roadways.  Traffic deaths rose last year for the first time in a decade (to just over 35,000) and are estimated to have increased another 10% in the first half of this year.  94% are caused by human error, lead by distracted driving.   It’s been pointed out that while technology has made cars safer, the number of distractions is ever-growing, offsetting those safety gains.  The Michigan DOT Director said he believes self-driving cars will solve the distracted driving problem.  There is concern though that the technology will give drivers a false sense of security and ultimately individuals must and will remain responsible for the conduct of the driving.

The NHTSA’s Rosekind admits the agency has taken a backseat in the past and is trying to show more leadership on automated vehicle policy going forward.  The agency issued recent guidance that covers vehicle performance, a model state policy to build a consistent national framework for vehicle testing and operation, a review of current regulations that may apply, and potential additional regulation.

The guidance states that insurance and liability apportionment are state responsibilities but references the possibility of convening a commission to study those issues further.  Rosekind said he doesn’t know what role auto insurance will play in the future of automated vehicles.  Automobile manufacturers and others have expressed concern about regulatory ambiguity in NHTSA’s guidance.  Rosekind said the best way to build public confidence in emerging technologies is to work together and show that the government is on the side of innovation and the industry is on the side of safety.


Adequate Website Accessibility – For ALL users
Because much of what happens in the insurance industry depends on the real estate industry, it was a wakeup call at the recent 2016 National Association of Realtors (NAR) where discussions of website accessibility were prevalent.  Recent NAR research shows that 95 percent of all buyers now use the Internet at some point during the home search process, and a vocal portion of these users are those with disabilities. There are 12.6 percent of the U.S. population – 39 million people – with a disability.

Because the Americans with Disabilities Act predates widespread use of the Internet and courts have been split on the issue, recent court cases have found that a business’s accessibility obligations extend to its website and mobile applications. Litigators involved in website accessibility cases recommend organizations familiarize themselves with the Web Content Accessibility Guidelines 2.0 AA, which is a technical standard created by the World Wide Web Consortium to help make sites more accessible. In fact, it makes sense that vendors use these standards and web designers must ensure the site continues to remain in compliance as content evolves.

Accessible websites coordinate with assistive technology software used by people with visual, hearing, motor and other disabilities, to augment content and make it easier to consume. For example, they can add text descriptions to complex graphics, limit pop-ups and flashing colors, add voice-overs that read text aloud, and add transcripts to videos.

In 2010, the Department of Justice (DOJ) announced it would publish technical standards for website accessibility. No standards have been published yet, however, and in 2016 the DOJ announced a delay for development of the standards to sometime in 2018. Until these guidelines are published, organizations are exposing themselves to ligation and shouldn’t make themselves a target by having a website that isn’t compliant.

Steps to reach compliance and potentially avoid future litigation include:

*Assign an executive to be responsible for website accessibility

*Develop and execute a digital accessibility training plan

*Conduct an assessment of websites and applications

*Document the ongoing status of accessibility efforts

*Work with third-party vendors to acquire and implement software and features

*Prioritize any content accessibility violations

*Continue to assess online sites and tools for compliance


Reality TV Show Launched by Public Adjusting Firm
Insurance Wars, a reality TV series launched by Noble Public Adjusting Group executives, will debut early next year.    The reality show will reflect the view of Noble’s owners with respect to how claims are settled and the challenges associated with claims settlement. Observers are curious to determine if Noble will engage insurance company claim executives or leave the show to be one-sided.  Filming has taken place over the course of a year and a half with Noble’s owners, Bo and Heather Williamson indicating the length of time to complete filming and production of the show was because they didn’t want to delay claim settlements of their existing customers.   Season one is set to air in January of 2017 on ABC, Fox, The CW and other local channels as well.  Airing times and dates are yet to be determined and few details are available as to who will be featured on the show.   To see updates on the show and information as it nears the time of airing, one must “Like” the Facebook page and click “see first” from the drop-down box on the like button.


Dreams:  Following the North Star
As we spent last week being grateful and thankful, I thought I would share this brilliant mini-essay I read in a recent blog by my dear friend, Jack Levine, who has spent more than 40 years advocating for children’s causes in the legislature.  There is no greater champion for children and I often visit with him to keep me grounded when I fret about things in the insurance industry!  He reminds us that political candidates talk to us in terms of policies, programs, projects, and activities but we don’t hear enough about the world they want us to help create for our children and grandchildren. To hold political leaders and ourselves accountable for helping to create a better world, here is a practical set of dreams to serve as a North Star for us all….

* Dream that no person regardless of color, race, creed, nationality, gender, age or sexual preference will be known by anything other than their character and contributions to family, community and society.

* Dream that no one will be unjustly under the care, custody, or control of another person, agency, or substance and that every adult will be self-sufficient, self-reliant, and have a positive, productive quality of life.

* Dream that everyone can walk the streets of their cities without being harassed, molested, or murdered.

* Dream that we have clean water, clean air, and sufficient food to obtain and maintain good health.

Will you share these dreams and perhaps add a few of your own? I look forward to hearing from you as we start this beautiful season of dreams!

Wishing you all the best,

Lisa and the LMA team