Changes to Worker’s Compensation! Important…

Special thanks to Vicky Zelen for the information provided below. You can reach her company Zelen Risk Solutions at 904- 262-8080.

Workers’ Comp Rates Increased Slightly Effective January 1, 2014

The National Council on Compensation Insurance (NCCI) proposed and the Office of Insurance Regulation (OIR) approved a 0.7% average rate increase, which will apply to all new and renewal workers’ compensation policies effective January 1, 2014.  Individual class codes may increase more than +.7%, or some may actually decrease.  For example, contracting class codes will increase an average of +3.2%, while manufacturing codes will see a rate decrease of -3.5%.  Even though rates are up slightly effective January 1, 2014, Over the past 11 years (from 10/1/2003 to 1/1/2014), Florida workers’ compensation rates have gone down an average of 55.9% – which is great news.  Please call Zelen Risk Solutions to find out what your new rate will be when your policy renews in 2014 at 904-262-8080.

 

Workers’ Compensation Experience Modification Factor (EMF or Mod) Calculation 

 The Workers’ Compensation Experience Modification Factor calculation has changed – the split point has not been changed in over 20 years – however – the average claim cost has gone up from $2,500 to almost $9,000.  If your WC premium over the past 3 years is over $5,000 each year or if your premium has exceeded $10,000 for the past 2 years, then you will have an Experience Modification Factor automatically calculated for you by NCCI – the National Council on Compensation Insurance.  A good mod is 0.90 because that factor gets multiplied against your premium, so you’d be saving 10% over the average company.  A bad mod is 1.20 – which will cost you 20% higher than the average because you’ve had a claim or claims go into your mod formula.  The maximum claim/loss that used to go into the formula was $5,000 (this was true for over 20 years)  – and it has increased, eff 1/1/13 to $10,000 and 1/1/14 to $13,500 and 1/1/15 to $15,000 plus 2 years trended (estimated at $17,000 – $17,500) – so – if you’ve had larger claims in the past few years – it will negatively affect your experience modification factor.  Please feel free to call Zelen Risk Solutions, Inc. at 904-262-8080 if you have any questions.
Workers’ Compensation Exemptions

When you file a workers’ compensation exemption with the state of Florida, you are deciding NOT to purchase workers’ compensation insurance because if you get injured on the job, you’re planning to take care of yourself.  If you file for an exemption – you will not be covered for workers’ compensation.  There are different rules regarding exemptions based on if you are in the construction industry vs if you are NOT in the construction industry and also depending on whether you’re operating as a sole proprietor, partner, corporation or LLC.

 

In the past, if you were a managing member of a non-construction LLC, you could not file for an exemption – however – effective July 1, 2013, you can file for an exemption.  Please see below – it’s very important because if you are buying worker’s compensation insurance for your employees, your payroll will get picked up at audit and you’ll owe additional premium for the managing members – unless you file an exemption with the state.

Minimum Payrolls apply for Officers and Managing Members of LLC’s – So – if you don’t exempt yourself, you’ll pay for Workers’ Compensation Premium on the following minimum payrolls – even if you don’t pay yourself the below payrolls – so – be very careful:

 

Effective January 1, 2014 – Minimum Payrolls:

Executive Officers in the Construction Industry:  $400 weekly, or $20,800 annual

All other Executive Officers:  $800 weekly, or $41,600 annual

Partners and Sole Proprietors – any industry:  $42,400 annual

 

Click here for a comprehensive summary about the rules for exemptions and click here for the Florida Construction Class Codes.  If you’d like, we can e-mail instructions to you about how to file an exemption on-line (that’s the only way you can file it now).

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