Update - Winter 2008
FASI E-Newsletter
Winter 2008
February 29, 2008
Inside This Issue:

Murray Arguments Set for April 9th

Convention 2008 Promises to be Power-Packed with Great Opportunities!

Liability News Alert

Editor's Corner

Member Spotlight: JoAnne Ackman

Membership Report

Contact Us:

FASI Website

E-Mail FASI Headquarters

President's Message
--by Gail Shuffler, FASI President

The economy is slumping everywhere including Florida. The Governor's recently proposed budget includes transferring significant amounts from various trust funds including the Workers' Compensation Trust Fund. While we all clearly recognize that the economic climate is less than desirable, it does give one pause to wonder how the Governor and Legislature will balance the budget in the next fiscal year if they use trust fund balances to fund recurring costs but have no projection for significant upturn in state revenues.

As you know, these assessment fees are paid by employers and carriers who are subject to the Florida Workers' Compensation Law and were recently decreased by the Honorable Alex Sink due to a healthy decline in Workers' Compensation premiums.

One of the Governor's Budget office employees has replied to a FASI member that since this trust fund "had a significantly declining balance and an increase in assessment rates was inevitable, even without the proposed transfer to General Revenue." This same budget office employee also stated, "...is a prudent alternative to raising taxes." They may not call it a tax but it is certainly a cost that will be passed on to the employers of this state who are likely suffering their own budget burdens.

As President of FASI, I along with our other Board members, urge you to contact your respective elected officials, the Governor and Alex Sink urging them to allow this fund to stabilize. FASI's website, along with our recent alerts, will provide you with sample letters. Please take the time to help us in this important endeavor.

Murray Arguments Set for April 9th
--by John Darin

Recently the Florida Supreme Court granted leave for the U.S. Chamber of Commerce and the Florida Chamber of Commerce to file an Amicus Brief in support of industry in the highly controversial Murray v. Mariner case which is set for argument on April 9, 2008. At issue is the constitutionality of the limitations on attorneys' fees which took effect on October 1, 2003, for those attorneys representing injured workers.

The appellant contends that the "reasonable fee" language of the statute trumps the guideline fees enacted by the legislature when those guidelines would yield a manifestly unfair fee. In the Murray case, the total guideline fee award of $648.84 divided by the number of hours the claimant's attorney had in the case yielded $8.11 an hour, whereas the defense attorney had earned over $16,000.00 at $125.00 an hour for the same case.

The appellant argues that the cap on claimants' attorneys fees with no corresponding cap on defense attorneys' fees violate injured workers' rights to equal protection by giving carriers unlimited legal representation whereas the statute restricts the amount of fees an injured worker's attorney can make. Appellant also contends that the fee guidelines violate injured workers' rights to due process because it impairs their ability to retain an attorney. The argument is that the guideline attorneys' fees are so low, injured workers with low cost claims, such as a week of TTD or small adjustment in the AWW, will not be able to find attorneys to represent them for those small claims.

Because injured workers with small claims will have difficulty obtaining counsel, it is argued they are also being denied access to the Courts, contrary to Article I of the Florida Constitution. Finally, appellant argues that only the Supreme Court should have jurisdiction over attorneys' fees, so the Legislature violated the Separation of Powers doctrine through the 2003 amendment of F.S. 440.34.

Mariner Health, the appellee, argues that the District Court of Appeal did not err in following its prior precedents, finding the amendment constitutional, especially since the Florida Supreme Court had previously denied review in those cases. Mariner argues that the Legislature was attempting to level the playing field, and simply applied the same fee guidelines which had always applied to claimants paying their attorneys, to the awards entered against carriers and self-insureds. In order for Florida to remain competitive with its sister-states, much less a global economy, the legislature had to make some adjustments in the workers' compensation system. Weighing the job security of all workers in Florida against the small minority of workers who may get injured, and an even smaller number of attorneys representing those injured workers, the "good old days" of encouraging multiple petitions and delays in proceedings could be tolerated no more. Something had to change!

The appellant has the burden of demonstrating there is no conceivable basis for upholding the law. Mariner contends that F.S. 440 still provides injured workers with a viable source of relief, and there was no common law right to attorneys' fees to a prevailing party. Mariner argues that in any case in which there is little at stake, whether in Comp, Small Claims Court or County Court, the attorney fee will be small. No hourly fees are awarded to the prevailing party in Small Claims Court or County Court, so there is no Constitutional right to attorney's fees, much less hourly fees, to any prevailing party. Injured workers are still given preferential treatment under F.S. 440.34, which still ensures injured workers will net their total award by providing for carrier paid fees.

As for the equal protection and due process attacks, the Mariner brief goes into detail explaining that neither provision has been violated. It is further argued that the inability to obtain counsel argument is without merit in Emma Murray's case because she was represented by excellent attorneys on both the trial and appellate levels. Finally, Mariner argues that the Florida Supreme Court itself has ruled that the Judges of Compensation Claims are part of the Executive Branch, rather than the Judicial Branch, so the Florida Supreme Court would not have exclusive jurisdiction over fee issues. The next FASI Update may have a decision, so stay tuned!

FASI's Convention 2008 Promises to be Power-Packed with Great Opportunities!

Mark your calendar now for FASI's 39th Annual Educational Conference and Trade Show scheduled July 20 - 23, at the Ritz-Carlton in Naples, Florida. This year's Educational Committee has assembled an incredible program with relative topics for those companies that are self-insured or thinking of becoming self-insured. Here are the titles of the sessions for the Conference:

* Business Continuity/Disaster Management
* Cognitive Claim
* Workers' Comp -- Changing the Game
* Legislative Update
* How to Become Self-Insured and the Benefits (All Lines)
* Actuarial Reports (Before and After Self-Insurance)
* Best Practices of Self Insureds
* Captives and Risk Finance

By registering to attend this Conference you'll have an opportunity to hear from the experts on the topics above, network with colleagues from all areas of the self-insured industry, visit with exhibitors at the Trade Show, and enjoy some social time at the Welcome Reception on Sunday and the Casino Dinner Party on Tuesday. For those who enjoy a rousing game of golf, FASI's Golf Outing on Sunday morning is an event you won't want to miss either!

Watch your mail/e-mail for detailed information on this Conference or visit www.fasi-fl.org and click on the "Conference" page.

Liability News Alert
--by Sonia Marshall of Royal Medical-MSA Consultants

It appears that general liability will no longer be able to enjoy a free pass with the Medicare Secondary Payer Act as Federal Government passes NEW Legislation:

On December 29, 2007, the President signed a bill amending the Social Security's Medicare Secondary Payer Act and adds liability and no-fault settlements into the process with stiff financial penalties for non-compliance. Beginning 7/1/2009, all third party "applicable plans" (defined in the bill as: "Liability Insurance, including self-insurance, No fault insurance and Workers Compensation laws and plans") must determine Medicare status on all claims and report those to the Secretary of Health and Human Services at the time of a settlement, judgment or award. The Federal Government is providing the means for Medicare to obtain data to determine if their interests were considered in a compromise. For those who do not comply with the new law, the Secretary will enforce a civil penalty in the amount of $1,000 per day, per claim. The intent is to enforce Medicare's Secondary Payer rights. However, there are still many unanswered questions with clarification anticipated from the CMS within the upcoming months.

The Center for Medicare and Medicaid Services (CMS*) did not enforce Medicare Set Asides in liability and no-fault in the past, however, a 2003 U.S. Court of Appeals decision determined that Medicare did have a right to recovery in a civil litigation class action law suit, confirming the MSP Statute also expands to civil litigation.

Editor's Corner
--by John Darin

Quite a bit went on at the Mid-Winter Conference. The Board of Directors decided to offer more educational programs and resources for all lines of self-insurance, in addition to FASI's well know concentration in the area of workers' compensation. While workers' compensation issues had always been on the short list of employer problems, the 2003 amendments have resolved some of the more serious pitfalls in that system, which will now allow FASI to address other areas in need of reform. A not-so-friendly warning to any plaintiffs' PIP and Liability Attorneys tuned in: Talk to your peers on the comp side to see what awaits you if you don't mend your ways.

On a happier note, Laurie Lowe of Johns Eastern Company was appointed to the Board of Directors. Laurie started her tenure by volunteering for a new board project; way to go Laurie! Also at the Mid-Winter Conference, the group decided on a theme for the Summer Educational Conference this election year. What else but "Elect Self-Insurance." Election paraphernalia will be evident everywhere during the Conference, which may drive the refined Ritz staff and guests absolutely nuts. Oh, well. See you there!

Member Spotlight: JoAnne Ackman, Scott-McRae Automotive Group
--by John Darin

What does Scott-McRae Automotive Group do? SMAG is the holding company for primarily nine franchised new car dealerships as well as an advertising agency, a subprime finance company in five southeastern states and a long-term leasing company. We currently have four dealerships in Jacksonville, two in Gainesville and three in the Tampa area. Overall, SMAG employs over 1,000 employees with over $700 MM in gross revenues.

What are your duties at Scott McRae? My official title is Risk Manager but my duties range from monitoring our Safety Program and ensuring recommendations are implemented to handling all of our companies' property and casualty claims including workers' compensation. I also prepare specifications to market and place all property and casualty lines.

What was your background? I attended Florida State University but did not get a degree. I started in the insurance business in 1974 with a local independent agent in Jacksonville and worked my up until I became the Administrative Manager handling large accounts when I was asked to join the Scott-McRae Group. I do have a 2-20 license and my AAI designation. I have completed two parts of RPLU and the first part of my ARM designation.

What led Scott-McRae to consider self-insurance? While I was not here when the initial decision was made, the move was primarily made to enjoy the profitability of good loss experience.

Why did Scott-McRae join the Florida Association of Self-Insurance? My main reason for joining FASI was to stay informed on issues relevant to our status as a self-insured as well tap into the knowledge offered by other self-insureds to make sure we are maximizing our advantages.

What do you see as the advantages of being self-insured in Florida? Basically, the main advantages are 1) control and 2) financial benefits. We have enjoyed much success in our workers' compensation program. It's empowering to have the positive cash flow and the ultimate control of claims payments. We have been able to bring a positive impact to our bottom line which we feel can be attributed to our great working relationship with our TPA (Commercial Risk Management). We have utilized their services for the twenty years we have been self insured and they have been great partners.

What else would you like to see on the self-insurance front? We are currently trying to see if it's feasible to self-insure any of our remaining property and casualty lines. I know this option is one being utilized, but it's not one that anyone is out there trying to sell.

Membership Report
--by Mark Resler

FASI just completed the winter planning conference in Orlando and attendance was tremendous. Our 2008 membership drive is well under way, and our figures indicate that we are trending to enroll about the same number of members we had in 2007. Final renewal notices were sent in late January and we anticipate a lot of first quarter activity. Therefore, please address your FASI membership if you have not already done so. We really need your support, and we welcome your input.

The Membership Committee meeting in Orlando generated quite a bit of discussion concerning increasing the number of members. As the membership chairman, I was really excited by the interest and help offered by meeting attendees. With this help and enthusiasm, I truly believe we can do better than 2007. The FASI board of directors is also entertaining some ideas to foster enrollment as well.

Again, it was great to see such a good turnout at our planning event. It's the best venue to get your interests addressed, which often end up as part of the program at the annual educational conference at Naples in July.

Please contact FASI directly at 1-800-226-FASI (3274) if you know of anyone interested in discussing FASI memberships, or pass this number on to the interested party, or refer them to the website www.fasi-fl.org.

If you have questions or comments about the FASI E-Newsletter, please contact: Bill Kautter at bkautter@kmgnet.com (800-226-3274) or Newsletter Chair John Darin at jdarin@znoskoreas.com.

Please note that letters and comments sent to the publisher are automatically considered for use in upcoming issues unless you expressly request that they not be used. You may request that you remain anonymous in the case that your letter or comments are used. We reserve the right to edit for brevity and/or clarity.

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