In any auto accident case, there are two types of damages that could be awarded to a person injured in an accident. They are economic damages and non-economic damages. Generally speaking, economic damages are damages that are easily measured such as medical bills. We’ll go more in depth on those in this article. The other type, non-economic damages, are harder to measure damages such as pain and suffering and the accompanying value to be placed upon such pain and suffering.

 

Fla. Stat. 768.81(b)

Fla. Stat. 768.81(b) defines “economic damages” as “past lost income and future lost income reduced to present value; medical and funeral expenses; lost support and services; replacement value of lost personal property; loss of appraised fair market value of real property; costs of construction repairs, including labor, overhead, and profit; and any other economic loss that would not have occurred but for the injury giving rise to the cause of action.”

For most personal injury actions arising from an automobile accident, out of all these categories, we’re generally talking about lost income and medical expenses.

 

Calculating Lost Income

As to lost past income, this is relatively straightforward. However, before proving the lost income, we have to prove entitlement to lost income. What this means is that we have to prove that you would not have missed work and lost income but for the accident. As such, to better assist your attorney in building the value of your case, it is imperative that you gather records of any hospital stays and physician recommendations to abstain from work. Additionally, you will need to gather the previous year’s income tax return, W-2’s, and/or a letter from your employer confirming your work and pay rate.

If you are an hourly employee, the calculation from here is easy. Simply take your hourly wage, we’ll use $20 per hour as an example, and multiply it by the number of hours missed. To continue the example, let’s assume you missed 10.5 days of work and you work 8 hours per day. As such, you missed 84 hours of work. Multiply $20 by 84 hours and you missed out on $1,680.00 in lost income.

If you are a salaried employee, it is slightly more nuanced. If your employer still paid you your salary every couple of weeks despite the missed time, you don’t have any lost income, obviously. However, if your salary was decreased due to the missed work time, the math is relatively simply: you take your annual salary and divide it by 2080 (the number of weekday work hours in a year). Then you multiply that by the number of missed hours for which you were not paid.

So, for example, if you made $100,000/year and you missed two weeks of work and your salary was reduced accordingly, $100,000 / 2080 = $48.08. Two weeks equals 10 missed days. Assuming 8-hour days, you missed 80 hours of work for which you were not compensated. Therefore, you are entitled to $3,846.40 in lost income ($48.08 x 80).

Calculating lost future income is much more difficult and, generally, you need an economist to prove the lost future income. The reason an expert is needed is that any award for future lost income must be discounted to present-day value. Additionally, calculating future missed work days is more speculative as well. To illustrate, let’s assume that a jury finds that a person will miss 100 work days over the remainder of his/her life. That person makes $20/hour. That works out to $16,000.00 in missed income. However, a dollar today is worth more than a dollar tomorrow due to inflation. As such, it must be discounted. Let’s assume that discount rate is 5%. So, the award would be $15,200.00 (it is more complicated than this and this math is simplified for illustration purposes).

 

Calculating Past and Future Medical Expenses

This used to be relatively simple, i.e., a medical provider charged $1,000 for a service related to the accident, you can ask for $1,000 for past medical expenses. Future expenses were proved similarly, i.e., a surgery in the future will cost $50,000, you can ask for $50,000 reduced to present-day value.

However, the Florida Legislature enacted Fla. Stat. 768.0427 in 2023. It focuses on the amount the provider will receive from third-party sources, mainly insurance, Medicare, and Medicaid rather than the billed amount. The relevant portion of the statute is below.

 

(b) Evidence offered to prove the amount necessary to satisfy unpaid charges for incurred medical treatment or services shall include, but is not limited to, evidence as provided in this paragraph.

  1. If the claimant has health care coverage other than Medicare or Medicaid, evidence of the amount which such health care coverage is obligated to pay the health care provider to satisfy the charges for the claimant’s incurred medical treatment or services, plus the claimant’s share of medical expenses under the insurance contract or regulation.
  2. If the claimant has health care coverage but obtains treatment under a letter of protection or otherwise does not submit charges for any health care provider’s medical treatment or services to health care coverage, evidence of the amount the claimant’s health care coverage would pay the health care provider to satisfy the past unpaid medical charges under the insurance contract or regulation, plus the claimant’s share of medical expenses under the insurance contract or regulation, had the claimant obtained medical services or treatment pursuant to the health care coverage.
  3. If the claimant does not have health care coverage or has health care coverage through Medicare or Medicaid, evidence of 120 percent of the Medicare reimbursement rate in effect on the date of the claimant’s incurred medical treatment or services, or, if there is no applicable Medicare rate for a service, 170 percent of the applicable state Medicaid rate.
  4. If the claimant obtains medical treatment or services under a letter of protection and the health care provider subsequently transfers the right to receive payment under the letter of protection to a third party, evidence of the amount the third party paid or agreed to pay the health care provider in exchange for the right to receive payment pursuant to the letter of protection.
  5. Any evidence of reasonable amounts billed to the claimant for medically necessary treatment or medically necessary services provided to the claimant.

 

(c) Evidence offered to prove the amount of damages for any future medical treatment or services the claimant will receive shall include, but is not limited to, evidence as provided in this paragraph.

  1. If the claimant has health care coverage other than Medicare or Medicaid, or is eligible for any such health care coverage, evidence of the amount for which the future charges of health care providers could be satisfied if submitted to such health care coverage, plus the claimant’s share of medical expenses under the insurance contract or regulation.
  2. If the claimant does not have health care coverage or has health care coverage through Medicare or Medicaid, or is eligible for such health care coverage, evidence of 120 percent of the Medicare reimbursement rate in effect at the time of trial for the medical treatment or services the claimant will receive, or, if there is no applicable Medicare rate for a service, 170 percent of the applicable state Medicaid rate.
  3. Any evidence of reasonable future amounts to be billed to the claimant for medically necessary treatment or medically necessary services.

Because it is a relatively new statute, it is still being developed how this will impact the presentation of evidence at trial. The last section of both future and past medical expenses may be the saving grace that removes the complication of insurance reimbursement calculations. However, it does add a “reasonableness” component. It will be interesting to watch how this develops over the next few years.