For dates of accident prior to July 1, 1984, the State of Florida pays supplemental benefits for the Claimant’s entire life, and the Carrier pays the base PTD benefit. The supplemental benefits are actually paid through the State of Florida Workers’ Compensation Trust fund. The Trust Fund is funded through assessments on Carriers pursuant to F.S. 440.51.
What happens if you want to settle one of these “old dog” cases? The Carrier can certainly settle the PTD exposure, but what happens to the supplemental benefits? In Platt v. RC Property, 574 So. 2d 176 (1991), the First DCA ruled that the Employer/Carrier can settle their exposure for future PTD benefits by purchasing an annuity to continue paying those benefits, so long as the Employer/Carrier continues to have liability for the PTD benefits if the annuity company fails to pay out. If the Employer/Carrier does not fund the future benefits through an annuity, the First DCA has ruled that the Carrier can potentially be liable for future Supplemental benefits.
Recently, a client asked if there were any circumstances where the State of Florida Workers’ Compensation Trust Fund would settle directly with the Claimant. We contacted the State of Florida, Office of General Counsel for the Division of Financial Services. Our contact indicated that he met with and discussed the issue with some of the Fund’s trustees. They indicated that they have discussed the potential for supplemental benefit settlement in the past; however the way the annual assessments are set up, there is no funding within the State of Florida’s budget for supplemental benefit settlements.
Therefore, if you have a claim with a date of accident prior to July 1, 1984, and the Carrier is paying PTD benefit with the State is paying supplemental benefits, the only way to settle the PTD portion is through an annuity. That annuity must pay the Claimant the same PTD benefits he/she is currently receiving, for life. Additionally, the Employer/Carrier must acknowledge that they have continuing responsibility for the PTD benefits in the event that the annuity company is unable to continue paying. Additionally, we recommend that you obtain approval from the State of Florida, and continue to report the PTD payments that the Claimant receives through the annuity. If you have any questions on these Platt settlements, do not hesitate to give us a call.