Costs per Workers’ Comp Claims in Michigan Low Prior to 2011 Reforms

December 9, 2013

The total costs for a workers’ compensation claim in Michigan were low compared with other states according to a recent study by the Workers Compensation Research Institute (WCRI), Michigan System Performance Prior to the 2011 Legislative Changes: CompScope Benchmarks, 14th Edition.

The study covers the period prior to the passage of major workers’ compensation legislation in 2011.

The 2011 legislative changes included defining disability and post injury wage-earning capacity in accordance with past decisions of the Michigan Supreme Court, extending the number of circumstances under which benefits could be terminated, extending offsets for retirement benefits, and extending employer control of medical care, among other changes.

The study found that for 2009, total costs per workers’ compensation claim in Michigan were 12 percent lower than the median state in the 16-state study. Lower medical payments per claim were a key contributing factor. The average medical payment per claim was one of the lowest of the study states, 35 percent lower than the 16-state median.

Among other major findings:

  • Indemnity benefits per claim — wage replacement payments — were typical in Michigan. This was a result of offsetting factors: a shorter duration of temporary disability and less frequent, but more costly, lump-sum settlements.
  • Litigation expenses per claim were typical and grew more slowly relative to those in other study states.
  • Growth in total costs per claim in Michigan was among the slowest among the study states.

Source: Workers Compensation Research Institute (WCRI)

 

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