Michigan Legislature Introduces Workers Comp Reform

House Bill 5002 (2011) has been introduced and will radically change workers comp in the State of Michigan.

It is no secret that the Michigan Manufacturers Association (MMA) and the Michigan Self-Insurers’ Association (MSIA) have been pushing for changes to workers comp. Several proposed drafts of these changes have been floating around for weeks.

House Bill 5002 reads like a wish list for these organizations as they try to further their agenda in Lansing. Since workers comp premiums are going down on average 7.4 percent next year, these organizations are arguing that these changes are necessary to improve the business climate by providing both employers and workers with reliability and predictability.

The only thing that will be more reliable and predictable with this legislation is that workers are going to get less workers comp benefits and families will suffer.

Partial Disability

Perhaps the most disturbing of these changes is the introduction of partial disability. An employer or insurance company will now be able to reduce the workers comp rate by a hypothetical wage earning capacity. The current law only allows for a reduction of benefits for wages that are actually earned.

This change will remove the major incentive that an employer has to bring an injured worker back to work. The employer will not have to worry about accommodating restrictions or helping the injured worker get retrained.

The workers comp rate will simply be reduced based upon a job that may or may not exist. We have already seen some employers argue that benefits should be cut because a person can hypothetically work at Meijer as a greeter or at McDonalds as a cashier. It does not matter if these jobs are truly available or if the worker will even be hired.

The original intent of this law was to give employers an incentive to help its injured workers get back to gainful employment. The effect now will be to cut the workers comp rate in nearly every case. This will create chaos in the system by making the workers comp rate a question of fact after nearly every injury.

The grand bargain of workers comp will also be destroyed. Employees gave up the right to sue their employers in exchange for certain guaranteed benefits. An employee is supposed to receive 80% of his or her after-tax average weekly wage. This works out to be approximately 60% of gross income. Not exactly a windfall for a person who cannot work. Now the workers comp rate will be cut even further by imaginary wages from an imaginary job.

These changes will also cause a massive cost shift. When an injured worker does not receive adequate benefits from workers comp, they will simply abandon their claim and apply for unemployment or state aid. Taxpayers will pick-up the tab for employers and insurance companies.

More control of medical treatment for the employer

We believe the most important benefit under workers comp is access to medical care.  Employers are required to provide reasonable and necessary medical treatment for a work-related injury.

Employers are given sole authority to select the medical provider during the first 10 days after an injury. We frequently see individuals who are sent to industrial clinics and are not provided with proper medical care.

Workers are diagnosed with a sprain or strain when they actually have a tear or herniation. They are sent on their way and told to get back to work.

The proposed legislation would expand the employers control to 90 days. This would delay proper medical care even further. Studies have shown that the sooner a person gets medical care, the faster they get back to work.

You can help stop House Bill 5002

We do not believe that the representatives who sponsored this bill are anti-worker. They simply want to make Michigan the best and most competitive it can be. We are asking that all of our clients contact their state representatives and tell them to fix House Bill 5002.

There is no doubt that workers comp reform needs to happen. This is clear from the current burden of proof that requires an injured worker to define the universe of jobs that he or she is qualified and trained to perform. A nearly impossible task that has created even more litigation for both sides.

Workers comp reform needs to be accomplished with input from both employers and employees. Together we can preserve the grand bargain of workers comp that has lasted for nearly 100 years in Michigan.

Alex Berman is the founder of Michigan Workers Comp Lawyers. He’s been representing injured and disabled workers exclusively for more than 35 years.  Alex has helped countless people obtain workers compensation benefits and never charges a fee to evaluate a case.

Related information:

House Bill 5002 (2011)

Michigan House of Representatives – Find A Representative by Address

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