CFO Sink Orders 50 Percent Reduction in Workers’ Comp Admin Trust Fund Assessment Rate
CONTACT: Tara Klimek or Nina Banister
TALLAHASSEE— Florida Chief Financial Officer Alex Sink today ordered a 50 percent cut in the 2008 Workers’ Compensation Administration Trust Fund assessment rate. This reduction is projected to result in as much as $19 million in savings that can be passed on to Florida employers.
“During the past five years, Florida’s healthy workers’ compensation system has led to the addition of 28 new carriers writing workers’ compensation in our state,” said CFO Sink. “A strong economy and tougher compliance efforts have generated significant premium growth, making these reductions to the workers’ compensation trust fund assessment rate possible.”
Florida law requires an annual review of assessments that workers’ compensation carriers and self-insurers pay into the Workers’ Compensation Administration Trust Fund (WCATF) to administer the state’s workers’ compensation system. The fund pays for the operation of the Department of Financial Services’ Division of Workers’ Compensation. Other programs funded through the WCATF include the Division of Insurance Fraud’s workers’ compensation enforcement activities, the Office of the Judges of Compensation Claims, Medical Services administered by the Agency for Health Care Administration, Vocational Rehabilitation administered by the Department of Education, and Child Labor regulation administered by the Department of Business and Professional Regulation.
CFO Sink’s order requires an assessment rate reduction from .50 percent to .25 percent of assessable workers’ compensation premiums. Statute requires that this change be reflected in the next workers’ compensation rate filings approved by the Office of Insurance Regulation after January 1, 2008. The assessment rate has dropped dramatically since 2002 when it was 2.56 percent.
Since the Legislature passed significant reforms in 2003, Florida’s workers’ compensation rates -- what carriers charge employers -- have dropped a cumulative 40 percent. Those Florida employers that are required to secure workers’ compensation coverage for their employees have saved hundreds of millions of dollars on their premiums since 2003. Meanwhile, thousands more workers are now covered under the system and the average penalty assessed against non-compliant employers has risen from $7,500 to nearly $26,000, stimulating greater compliance.
As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Alex Sink oversees the Department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. CFO Sink also serves as the State Fire Marshal.