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Work compensation changes pitched

State Rep. Paul Hawkes proposed major reforms in state workers compensation laws at a meeting with the Citrus County Builder's Association on Thursday night.

Citing state workers compensation costs that are among the highest in the nation, Hawkes said meaningful cost controls will happen only if the system undergoes a major overhaul.

The Crystal River Republican said his proposals should lower premium costs to about $500 per worker per year in the construction industry _ an 80 percent reduction in costs under existing law.

The legislator had a receptive audience for his proposals Thursday night. Since a compensation reform bill stalled in Florida's Senate last March, the builder's association has pushed local officials and state legislators for strong action.

"Everyone working in some industry is in an uproar over the cost," said Rainer Jakob, chairman of the association's task force on the issue and co-owner of Bay Area Air Conditioning.

Literature put out by the builders points out that Florida spends $4-billion on worker's compensation premiums per year, an increase of 300 percent since 1980.

The builders also cite massive premium increases since 1988 for individual job classifications. For example, wallboard installation rose from $11.42 per $100 in wages to $32.66, a 186 percent increase, and insulation work rose from $12.62 to $36.02, a 185 percent increase.

The hidden costs, they say, are fewer jobs, lower pay raises for employees and higher prices for consumers. They say the cost of workers compensation adds 10 percent to the price of the average house.

Hawkes said under the existing system, the insurer's liability for medical expenses is unlimited. The bill, which he is drafting, proposes a system that would put a $25,000 cap on how much an employee could be paid for lost wages and medical expenses.

"Under this proposal, you can handle 90 percent of the claims now filed under the current system," Hawkes said.

"Those that exceed $25,000 are the ones that break the backs of the insurance companies," he added.

He also would abolish the separate system of courts for workers compensation. Instead, disputes between employers and employees filing claims would be settled in the regular court system.

For permanent injuries, employers would pay only if a court found the employer negligent. Currently, the system pays for medical expenses and wages regardless of fault.

Also, the bill would require mandatory liability insurance for employers with more than 10 employees.

"A lot of people will have less protection under (this proposal)," said Hawkes. "But I'm telling you they have less protection anyway because they go without insurance or they don't have a job because of the cost."

The group of construction business owners seemed pleased with Hawkes's ideas.

"I think this is the best thing we've seen so far," said Jim Kellner, president-elect of the association and a developer. "But it'll need grass roots support."

Even so, several builders expressed doubt after the meeting that a proposal with such radical changes could make it through the legislature.

The builders, who endorsed Hawkes in the last election, also made little mention of the rift between the builders and Hawkes that led to the representative's request for the meeting.

Hawkes voted against the House bill introduced by Gov. Lawton Chiles. The bill put restrictions on legal and medical costs and targeted fraud, but Hawkes said the bill "only worked around the fringes."

The representative also supported a provision that would force self-insured employers to pay into the Joint Underwriting Association, the state's pool of high-risk employers who cannot purchase private insurance. Currently, only insurance companies pay into this pool.

Builders opposed the provision because many belong to the Florida Home Builder's self-insurance trust fund, which, like other self-insured funds, would face a possible 10 percent increase in premiums if forced to pay into the JUA. Hawkes said it is unfair that insurance companies alone should bear the burden of the high-risk pool.

Hawkes, who chairs the Republican task force on workers compensation in the House, said he will finish drafting the bill and send it to fellow Republicans next week.

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