Florida Senate - 2016                                     SB 986
       By Senator Simpson
       18-00585C-16                                           2016986__
    1                        A bill to be entitled                      
    2         An act relating to workers’ compensation system
    3         administration; amending s. 440.02, F.S.; revising
    4         definitions; amending s. 440.021, F.S.; conforming a
    5         cross-reference; amending s. 440.05, F.S.; requiring
    6         members of limited liability companies to submit
    7         specified notices; deleting a required item to be
    8         listed on a notice of election to be exempt; revising
    9         specified rules regarding the maintenance of business
   10         records by an officer of a corporation; removing the
   11         requirement that the Department of Financial Services
   12         issue a specified stop-work order; amending s.
   13         440.107, F.S.; requiring that the department allow an
   14         employer who has not previously been issued an order
   15         of penalty assessment to receive a specified credit to
   16         be applied to the penalty; prohibiting the application
   17         of a specified credit unless the employer provides
   18         specified documentation and proof of payment to the
   19         department within a specified period; requiring the
   20         department to reduce the final assessed penalty by a
   21         specified percentage for employers who have not been
   22         previously issued a stop-work order or order of
   23         penalty assessment; revising the penalty calculation
   24         for the imputed weekly payroll for an employee;
   25         amending s. 440.13, F.S.; eliminating the
   26         certification requirements when an expert medical
   27         advisor is selected by a judge of compensation claims;
   28         amending s. 440.185, F.S.; deleting the requirement
   29         that employers notify the department within 24 hours
   30         of any injury resulting in death; amending s. 440.42,
   31         F.S.; conforming a cross-reference; amending s.
   32         440.49, F.S.; revising definitions; revising the
   33         requirements for filing a claim; deleting the
   34         preferred worker program; deleting the notification
   35         fees on certain filed claims which supplement the
   36         Special Disability Trust Fund; conforming cross
   37         references; amending s. 440.50, F.S.; conforming
   38         cross-references; amending s. 440.52, F.S.; deleting a
   39         fee for certain registration of insurance carriers;
   40         amending s. 624.4626, F.S.; conforming a cross
   41         reference; providing an effective date.
   43  Be It Enacted by the Legislature of the State of Florida:
   45         Section 1. Subsection (9) and paragraph (c) of subsection
   46  (15) of section 440.02, Florida Statutes, are amended to read:
   47         440.02 Definitions.—When used in this chapter, unless the
   48  context clearly requires otherwise, the following terms shall
   49  have the following meanings:
   50         (9) “Corporate officer” or “officer of a corporation” means
   51  any person who fills an office provided for in the corporate
   52  charter or articles of incorporation filed with the Division of
   53  Corporations of the Department of State or as authorized or
   54  required under part I of chapter 607. For persons engaged in the
   55  construction industry, the term “officer of a corporation”
   56  includes a member owning at least 10 percent of a limited
   57  liability company as defined in and organized pursuant to
   58  chapter 605.
   59         (15)
   60         (c) “Employee” includes:
   61         1. A sole proprietor, a member of a limited liability
   62  company, or a partner who is not engaged in the construction
   63  industry, devotes full time to the proprietorship, limited
   64  liability company, or partnership, and elects to be included in
   65  the definition of employee by filing notice thereof as provided
   66  in s. 440.05.
   67         2. All persons who are being paid by a construction
   68  contractor as a subcontractor, unless the subcontractor has
   69  validly elected an exemption as permitted by this chapter, or
   70  has otherwise secured the payment of compensation coverage as a
   71  subcontractor, consistent with s. 440.10, for work performed by
   72  or as a subcontractor.
   73         3. An independent contractor working or performing services
   74  in the construction industry.
   75         4. A sole proprietor who engages in the construction
   76  industry and a partner or partnership that is engaged in the
   77  construction industry.
   78         Section 2. Section 440.021, Florida Statutes, is amended to
   79  read:
   80         440.021 Exemption of workers’ compensation from chapter
   81  120.—Workers’ compensation adjudications by judges of
   82  compensation claims are exempt from chapter 120, and no judge of
   83  compensation claims shall be considered an agency or a part
   84  thereof. Communications of the result of investigations by the
   85  department pursuant to s. 440.185(3) s. 440.185(4) are exempt
   86  from chapter 120. In all instances in which the department
   87  institutes action to collect a penalty or interest which may be
   88  due pursuant to this chapter, the penalty or interest shall be
   89  assessed without hearing, and the party against which such
   90  penalty or interest is assessed shall be given written notice of
   91  such assessment and shall have the right to protest within 20
   92  days of such notice. Upon receipt of a timely notice of protest
   93  and after such investigation as may be necessary, the department
   94  shall, if it agrees with such protest, notify the protesting
   95  party that the assessment has been revoked. If the department
   96  does not agree with the protest, it shall refer the matter to
   97  the judge of compensation claims for determination pursuant to
   98  s. 440.25(2)-(5). Such action of the department is exempt from
   99  the provisions of chapter 120.
  100         Section 3. Subsections (1), (2), (3), (5), (10), and (11)
  101  of section 440.05, Florida Statutes, are amended to read:
  102         440.05 Election of exemption; revocation of election;
  103  notice; certification.—
  104         (1) Each corporate officer who elects not to accept the
  105  provisions of this chapter or who, after electing such
  106  exemption, revokes that exemption shall submit mail to the
  107  department in Tallahassee notice to such effect in accordance
  108  with a form to be prescribed by the department.
  109         (2) Each sole proprietor, member of a limited liability
  110  company, or partner who elects to be included in the definition
  111  of “employee” or who, after such election, revokes that election
  112  must submit mail to the department in Tallahassee notice to such
  113  effect, in accordance with a form to be prescribed by the
  114  department.
  115         (3) Each officer of a corporation who is engaged in the
  116  construction industry and who elects an exemption from this
  117  chapter or who, after electing such exemption, revokes that
  118  exemption must submit a notice to such effect to the department
  119  on a form prescribed by the department. The notice of election
  120  to be exempt must be electronically submitted to the department
  121  by the officer of a corporation who is allowed to claim an
  122  exemption as provided by this chapter and must list the name,
  123  federal tax identification number, date of birth, driver license
  124  number or Florida identification card number, and all certified
  125  or registered licenses issued pursuant to chapter 489 held by
  126  the person seeking the exemption, the registration number of the
  127  corporation filed with the Division of Corporations of the
  128  Department of State, and the percentage of ownership evidencing
  129  the required ownership under this chapter. The notice of
  130  election to be exempt must identify each corporation that
  131  employs the person electing the exemption and must list the
  132  social security number or federal tax identification number of
  133  each such employer and the additional documentation required by
  134  this section. In addition, the notice of election to be exempt
  135  must provide that the officer electing an exemption is not
  136  entitled to benefits under this chapter, must provide that the
  137  election does not exceed exemption limits for officers provided
  138  in s. 440.02, and must certify that any employees of the
  139  corporation whose officer elects an exemption are covered by
  140  workers’ compensation insurance. Upon receipt of the notice of
  141  the election to be exempt, receipt of all application fees, and
  142  a determination by the department that the notice meets the
  143  requirements of this subsection, the department shall issue a
  144  certification of the election to the officer, unless the
  145  department determines that the information contained in the
  146  notice is invalid. The department shall revoke a certificate of
  147  election to be exempt from coverage upon a determination by the
  148  department that the person does not meet the requirements for
  149  exemption or that the information contained in the notice of
  150  election to be exempt is invalid. The certificate of election
  151  must list the name of the corporation listed in the request for
  152  exemption. A new certificate of election must be obtained each
  153  time the person is employed by a new or different corporation
  154  that is not listed on the certificate of election. A notice copy
  155  of the certificate of election must be sent to each workers’
  156  compensation carrier identified in the request for exemption.
  157  Upon filing a notice of revocation of election, an officer who
  158  is a subcontractor or an officer of a corporate subcontractor
  159  must notify her or his contractor. Upon revocation of a
  160  certificate of election of exemption by the department, the
  161  department shall notify the workers’ compensation carriers
  162  identified in the request for exemption.
  163         (5) A notice given under subsection (1), subsection (2), or
  164  subsection (3) shall become effective when issued by the
  165  department or 30 days after it an application for an exemption
  166  is received by the department, whichever occurs first. However,
  167  if an accident or occupational disease occurs less than 30 days
  168  after the effective date of the insurance policy under which the
  169  payment of compensation is secured or the date the employer
  170  qualified as a self-insurer, such notice is effective as of
  171  12:01 a.m. of the day following the date it is submitted mailed
  172  to the department in Tallahassee.
  173         (10) Each officer of a corporation who is actively engaged
  174  in the construction industry and who elects an exemption from
  175  this chapter shall maintain business records as specified by the
  176  department by rule, which rules must include the provision that
  177  any corporation with exempt officers engaged in the construction
  178  industry must maintain written statements of those exempted
  179  persons affirmatively acknowledging each such individual’s
  180  exempt status.
  181         (11) Any corporate officer permitted by this chapter to
  182  claim an exemption must be listed on the records of this state’s
  183  Secretary of State, Division of Corporations, as a corporate
  184  officer. The department shall issue a stop-work order under s.
  185  440.107(7) to any corporation who employs a person who claims to
  186  be exempt as a corporate officer but who fails or refuses to
  187  produce the documents required under this subsection to the
  188  department within 3 business days after the request is made.
  189         Section 4. Paragraphs (d) and (e) of subsection (7) of
  190  section 440.107, Florida Statutes, are amended to read:
  191         440.107 Department powers to enforce employer compliance
  192  with coverage requirements.—
  193         (7)
  194         (d)1. In addition to any penalty, stop-work order, or
  195  injunction, the department shall assess against any employer who
  196  has failed to secure the payment of compensation as required by
  197  this chapter a penalty equal to 2 times the amount the employer
  198  would have paid in premium when applying approved manual rates
  199  to the employer’s payroll during periods for which it failed to
  200  secure the payment of workers’ compensation required by this
  201  chapter within the preceding 2-year period or $1,000, whichever
  202  is greater.
  203         a. For employers who have not been previously issued a
  204  stop-work order or order of penalty assessment, the department
  205  must allow the employer to receive a credit for the initial
  206  payment of the estimated annual workers’ compensation policy
  207  premium, as determined by the carrier, to be applied to the
  208  penalty. Before applying the credit to the penalty, the employer
  209  must provide the department with documentation reflecting that
  210  the employer has secured the payment of compensation pursuant to
  211  s. 440.38 and proof of payment to the carrier. In order for the
  212  department to apply a credit for an employer that has secured
  213  workers’ compensation for leased employees by entering into an
  214  employee leasing contract with a licensed employee leasing
  215  company, the employer must provide the department with a written
  216  confirmation, by a representative from the employee leasing
  217  company, of the dollar or percentage amount attributable to the
  218  initial estimated workers’ compensation expense for leased
  219  employees, and proof of payment to the employee leasing company.
  220  The credit may not be applied unless the employer provides the
  221  documentation and proof of payment to the department within 28
  222  days after service of the stop-work order or first order of
  223  penalty assessment upon the employer.
  224         b. For employers who have not been previously issued a
  225  stop-work order or order of penalty assessment, the department
  226  must reduce the final assessed penalty by 25 percent if the
  227  employer has complied with administrative rules adopted pursuant
  228  to subsection (5) and has provided such business records to the
  229  department within 10 business days after the employer’s receipt
  230  of the written request to produce business records.
  231         c. The $1,000 penalty shall be assessed against the
  232  employer even if the calculated penalty after the credit and 25
  233  percent reduction have has been applied is less than $1,000.
  234         2. Any subsequent violation within 5 years after the most
  235  recent violation shall, in addition to the penalties set forth
  236  in this subsection, be deemed a knowing act within the meaning
  237  of s. 440.105.
  238         (e) When an employer fails to provide business records
  239  sufficient to enable the department to determine the employer’s
  240  payroll for the period requested for the calculation of the
  241  penalty provided in paragraph (d), for penalty calculation
  242  purposes, the imputed weekly payroll for each employee,
  243  corporate officer, sole proprietor, or partner shall be the
  244  statewide average weekly wage as defined in s. 440.12(2)
  245  multiplied by 1.5 2.
  246         Section 5. Paragraph (a) of subsection (7) and paragraphs
  247  (a) and (f) of subsection (9) of section 440.13, Florida
  248  Statutes, are amended to read:
  249         440.13 Medical services and supplies; penalty for
  250  violations; limitations.—
  252         (a) Any health care provider, carrier, or employer who
  253  elects to contest the disallowance or adjustment of payment by a
  254  carrier under subsection (6) must, within 45 days after receipt
  255  of notice of disallowance or adjustment of payment, petition the
  256  department to resolve the dispute. The petitioner must serve a
  257  copy of the petition on the carrier and on all affected parties
  258  by certified mail. The petition must be accompanied by all
  259  documents and records that support the allegations contained in
  260  the petition. Failure of a petitioner to submit such
  261  documentation to the department results in dismissal of the
  262  petition.
  263         (9) EXPERT MEDICAL ADVISORS.—
  264         (a) The department shall certify expert medical advisors in
  265  each specialty to assist the department and the judges of
  266  compensation claims within the advisor’s area of expertise as
  267  provided in this section. The department shall, in a manner
  268  prescribed by rule, in certifying, recertifying, or decertifying
  269  an expert medical advisor, consider the qualifications,
  270  training, impartiality, and commitment of the health care
  271  provider to the provision of quality medical care at a
  272  reasonable cost. As a prerequisite for certification or
  273  recertification, the department shall require, at a minimum,
  274  that an expert medical advisor have specialized workers’
  275  compensation training or experience under the workers’
  276  compensation system of this state and board certification or
  277  board eligibility.
  278         (f) If the department or a judge of compensation claims
  279  orders the services of an a certified expert medical advisor to
  280  resolve a dispute under this section, the party requesting such
  281  examination must compensate the advisor for his or her time in
  282  accordance with a schedule adopted by the department. If the
  283  employee prevails in a dispute as determined in an order by a
  284  judge of compensation claims based upon the expert medical
  285  advisor’s findings, the employer or carrier shall pay for the
  286  costs of such expert medical advisor. If a judge of compensation
  287  claims, upon his or her motion, finds that an expert medical
  288  advisor is needed to resolve the dispute, the carrier must
  289  compensate the advisor for his or her time in accordance with a
  290  schedule adopted by the department. The department may assess a
  291  penalty not to exceed $500 against any carrier that fails to
  292  timely compensate an advisor in accordance with this section.
  293         Section 6. Subsection (3) of section 440.185, Florida
  294  Statutes, is amended to read:
  295         440.185 Notice of injury or death; reports; penalties for
  296  violations.—
  297         (3) In addition to the requirements of subsection (2), the
  298  employer shall notify the department within 24 hours by
  299  telephone or telegraph of any injury resulting in death.
  300  However, this special notice shall not be required when death
  301  results subsequent to the submission to the department of a
  302  previous report of the injury pursuant to subsection (2).
  303         Section 7. Subsection (3) of section 440.42, Florida
  304  Statutes, is amended to read:
  305         440.42 Insurance policies; liability.—
  306         (3) No contract or policy of insurance issued by a carrier
  307  under this chapter shall expire or be canceled until at least 30
  308  days have elapsed after a notice of cancellation has been sent
  309  to the department and to the employer in accordance with the
  310  provisions of s. 440.185(6) s. 440.185(7). For cancellation due
  311  to nonpayment of premium, the insurer shall mail notification to
  312  the employer at least 10 days prior to the effective date of the
  313  cancellation. However, when duplicate or dual coverage exists by
  314  reason of two different carriers having issued policies of
  315  insurance to the same employer securing the same liability, it
  316  shall be presumed that only that policy with the later effective
  317  date shall be in force and that the earlier policy terminated
  318  upon the effective date of the latter. In the event that both
  319  policies carry the same effective date, one of the policies may
  320  be canceled instanter upon filing a notice of cancellation with
  321  the department and serving a copy thereof upon the employer in
  322  such manner as the department prescribes by rule. The department
  323  may by rule prescribe the content of the notice of retroactive
  324  cancellation and specify the time, place, and manner in which
  325  the notice of cancellation is to be served.
  326         Section 8. Paragraph (b) of subsection (2), paragraph (c)
  327  of subsection (4), paragraph (c) of subsection (6), paragraphs
  328  (c) and (d) of subsection (7), subsection (8), and paragraph (d)
  329  of subsection (9) of section 440.49, Florida Statutes, are
  330  amended to read:
  331         440.49 Limitation of liability for subsequent injury
  332  through Special Disability Trust Fund.—
  333         (2) DEFINITIONS.—As used in this section, the term:
  334         (b) “Preferred worker” means a worker who, because of a
  335  permanent impairment resulting from a compensable injury or
  336  occupational disease, is unable to return to the worker’s
  337  regular employment.
  339  In addition to the definitions contained in this subsection, the
  340  department may by rule prescribe definitions that are necessary
  341  for the effective administration of this section.
  345         (c) Temporary compensation and medical benefits;
  346  aggravation or acceleration of preexisting condition or
  347  circumstantial causation.—If an employee who has a preexisting
  348  permanent physical impairment experiences an aggravation or
  349  acceleration of the preexisting permanent physical impairment as
  350  a result of an injury or occupational disease arising out of and
  351  in the course of her or his employment, or suffers an injury as
  352  a result of a merger as defined in paragraph (2)(b) (2)(c), the
  353  employer shall provide all benefits provided by this chapter,
  354  but, subject to the limitations specified in subsection (7), the
  355  employer shall be reimbursed by the Special Disability Trust
  356  Fund created by subsection (9) for 50 percent of its payments
  357  for temporary, medical, and attendant care benefits.
  359         (c) An employer’s or carrier’s right to apportionment or
  360  deduction pursuant to ss. 440.02(1), 440.15(5)(b), and
  361  440.151(1)(c) does not preclude reimbursement from such fund,
  362  except when the merger comes within the definition of paragraph
  363  (2)(b) (2)(c) and such apportionment or deduction relieves the
  364  employer or carrier from providing the materially and
  365  substantially greater permanent disability benefits otherwise
  366  contemplated in those paragraphs.
  368         (c) A proof of claim must be filed on each notice of claim
  369  on file as of June 30, 1997, within 1 year after July 1, 1997,
  370  or the right to reimbursement of the claim shall be barred. A
  371  notice of claim on file on or before June 30, 1997, may be
  372  withdrawn and refiled if, at the time refiled, the notice of
  373  claim remains within the limitation period specified in
  374  paragraph (a). Such refiling shall not toll, extend, or
  375  otherwise alter in any way the limitation period applicable to
  376  the withdrawn and subsequently refiled notice of claim. Each
  377  proof of claim filed shall be accompanied by a proof-of-claim
  378  fee as provided in paragraph (9)(d). The Special Disability
  379  Trust Fund shall, within 120 days after receipt of the proof of
  380  claim, serve notice of the acceptance of the claim for
  381  reimbursement. This paragraph shall apply to all claims
  382  notwithstanding the provisions of subsection (12).
  383         (d) Each notice of claim filed or refiled on or after July
  384  1, 1997, must be accompanied by a notification fee as provided
  385  in paragraph (9)(d). A proof of claim must be filed within 1
  386  year after the date the notice of claim is filed or refiled,
  387  accompanied by a proof-of-claim fee as provided in paragraph
  388  (9)(d), or the claim shall be barred. The notification fee shall
  389  be waived if both the notice of claim and proof of claim are
  390  submitted together as a single filing. The Special Disability
  391  Trust Fund shall, within 180 days after receipt of the proof of
  392  claim, serve notice of the acceptance of the claim for
  393  reimbursement. This paragraph shall apply to all claims
  394  notwithstanding the provisions of subsection (12).
  395         (8) PREFERRED WORKER PROGRAM.—The Department of Education
  396  or administrator shall issue identity cards to preferred workers
  397  upon request by qualified employees and the Department of
  398  Financial Services shall reimburse an employer, from the Special
  399  Disability Trust Fund, for the cost of workers’ compensation
  400  premium related to the preferred workers payroll for up to 3
  401  years of continuous employment upon satisfactory evidence of
  402  placement and issuance of payroll and classification records and
  403  upon the employee’s certification of employment. The Department
  404  of Financial Services and the Department of Education may by
  405  rule prescribe definitions, forms, and procedures for the
  406  administration of the preferred worker program. The Department
  407  of Education may by rule prescribe the schedule for submission
  408  of forms for participation in the program.
  409         (8)(9) SPECIAL DISABILITY TRUST FUND.—
  410         (d) The Special Disability Trust Fund shall be supplemented
  411  by a $250 notification fee on each notice of claim filed or
  412  refiled after July 1, 1997, and a $500 fee on each proof of
  413  claim filed in accordance with subsection (7). Revenues from the
  414  fee shall be deposited into the Special Disability Trust Fund
  415  and are exempt from the deduction required by s. 215.20. The
  416  fees provided in this paragraph shall not be imposed upon any
  417  insurer which is in receivership with the department.
  418         Section 9. Paragraph (b) of subsection (1) of section
  419  440.50, Florida Statutes, is amended to read:
  420         440.50 Workers’ Compensation Administration Trust Fund.—
  421         (1)
  422         (b) The department is authorized to transfer as a loan an
  423  amount not in excess of $250,000 from such special fund to the
  424  Special Disability Trust Fund established by s. 440.49(8) s.
  425  440.49(9), which amount shall be repaid to the said special fund
  426  in annual payments equal to not less than 10 percent of moneys
  427  received for the such Special Disability Trust Fund.
  428         Section 10. Subsection (1) of section 440.52, Florida
  429  Statutes, is amended to read:
  430         440.52 Registration of insurance carriers; notice of
  431  cancellation or expiration of policy; suspension or revocation
  432  of authority.—
  433         (1) Each insurance carrier who desires to write workers’
  434  such compensation insurance in compliance with this chapter
  435  shall be required, before writing such insurance, to register
  436  with the department and pay a registration fee of $100. This
  437  shall be deposited by the department in the fund created by s.
  438  440.50.
  439         Section 11. Subsection (2) of section 624.4626, Florida
  440  Statutes, is amended to read:
  441         624.4626 Electric cooperative self-insurance fund.—
  442         (2) A self-insurance fund that meets the requirements of
  443  this section is subject to the assessments set forth in ss.
  444  440.49(8) ss. 440.49(9), 440.51(1), and 624.4621(7), but is not
  445  subject to any other provision of s. 624.4621 and is not
  446  required to file any report with the department under s.
  447  440.38(2)(b) which is uniquely required of group self-insurer
  448  funds qualified under s. 624.4621.
  449         Section 12. This act shall take effect October 1, 2016.