Michigan Workers’ Comp Costs Drop, Employment Rises

By | March 25, 2015

Michigan has had some positive developments on the employment and workers’ compensation fronts lately and state officials are eager to share the news.

Workers’ comp costs for employers in Michigan have dropped by nearly 28 percent since 2011 and the pure premium rate is expected to go down again this year, according to the Michigan Workers’ Compensation Agency (WCA), which oversees the workers’ comp system.

Meanwhile, Mich. Gov. Rick Snyder announced on March 25 that the state has added some 400,000 jobs in the private sector since the end of 2010. Additionally, the unemployment rate has dropped to 5.9 percent — the lowest in 14 years.

“The Michigan Workers’ Compensation Agency and our system in general has saved employers in this state over four years, $277 million,” said WCA Director Kevin Elsenheimer.

Elsenheimer attributed the decrease in costs in part to workers’ comp reforms that were passed by the legislature and signed by Gov. Snyder in 2011.

Those legislative changes included defining disability and post injury wage-earning capacity, 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 things, according to the Massachusetts-based Workers’ Compensation Research Institute (WCRI).

The 2011 reforms overhauled the state’s worker’ comp law for the first time in more than two decades, the Associated Press reported.

In a major change, workers’ comp benefit recipients are required to work if they’re offered a job within their skill set that they can physically perform. Workers may risk losing benefits if they refuse to take the job. And litigation over claim disputes is rare.

In a podcast on the WCA’s website, Elsenheimer described the agency’s mission as a simple one. “It is to put into effect the act and the goal of that act is also simple: It’s to make sure that injured workers get back to work as quickly as possible and get back to the maximum level of health as quickly as possible, and to do so as efficiently as possible.”

He added that workers seem to be pleased with the changes.

“We’ve asked, and our workers here in Michigan are very happy with the care they’re getting. … That’s a good thing and it’s something that we want to continue,” Elsenheimer said.

While results have been positive since the workers’ comp reforms of 2011, Elsenheimer said he’s going to keep pushing for more improvements.

“We’re going to look at health care costs, trying to keep control of those to make sure we get the most value out of every dollar spent possible. We’re going to look at our own internal structure, to make sure we’re maximizing the use of our people here in Lansing. But the bottom line is we’re not going to stop until we have the best workers’ compensation agency in the entire country,” he said.

Job Gains

Michigan leads the Midwest states in private sector job creation and nationally trails only California, Texas, Florida and New York, according to the governor’s office.

“We should be proud that our hard work in reinventing Michigan is showing results, with companies tapping our talent and legendary work ethic as they create more and better jobs,” Gov. Snyder said in an announcement. “But we can’t just be satisfied with being a leader in the Midwest. We’re working to lead the nation in developing the skilled trades, creating an environment for businesses to grow and thrive and building on the entrepreneurial spirit that is known around the globe.”

Michigan’s unemployment rate is now the lowest since October 2001. Of the nearly 400,000 private sector jobs added since December 2010, 105,000 have been in manufacturing.

Nearly 100,000 private sector jobs have created in Michigan in the past year, with significant increases in professional and business services; manufacturing; construction; trade, trade transportation and utilities; education and health services; and leisure and hospitality services, according to the governor’s office.

A few highlights of Michigan’s workers’ compensation system:
  • The workers’ compensation system was established in 1912.
  • Employers buy workers’ comp policies from private insurers, or they may be authorized to self-insure.
  • If a worker is injured on the job, the employer has the right to choose the injured employee’s doctor for 28 days. After that, the employee may choose their own medical provider, if they prefer.
  • The law requires prompt payment of benefits, with the first payment being due on the 14th day after the employer is notified of a disability or death. Benefits should be paid weekly.
  • According to the WCA, two out of three workers’ comp cases are voluntarily paid. If a dispute arises between an employee and the employer or insurance carrier, the WCA decides whether it may be resolved through mediation.
  • If mediation doesn’t work, the claim dispute may be assigned to be heard by a magistrate.
  • If either party is dissatisfied by a magistrate’s decision, it may be may appealed to the Michigan Compensation Appellate Commission (MCAC). MCAC decisions may be appealed to the Court of Appeals and then to the Supreme Court.

Related stories:

Some Work Comp Claims in Michigan Must First Go to Mediation

Michigan Workers’ Compensation Rates to Drop Again

Michigan Governor Signs Unemployment, Workers’ Comp Legislation

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

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