Why We Support Change In Lansing

Q&A with Governor Rick Snyder shows his total lack of understanding when it comes to workers’ compensation issues in Michigan.

Governor Rick Snyder has not yet announced his intentions to run for re-election. Although, it is pretty clear from early advertising that he will be seeking a second term.

The Governor has enormous power when it comes to the administration of the workers’ compensation system. He appoints the Agency Director, Appellate Commissioners, and Magistrates. He can issue executive orders and sign or veto legislation.

This blog post is our foray into the 2014 election cycle. We think it is time for a change in Lansing. Here is why Governor Snyder has got it all wrong about workers’ compensation.

Race to the bottom

MiBiz published a fascinating Q&A last week. Governor Snyder believes his role is to create the most competitive environment for businesses. He uses workers’ compensation reform as an illustration of things to come:

“We did reforms. For the last three years, when you look at pure premiums, the base rate … has come down 7 percent a year in each year. So we’re down about 20 percent, where a number of the surrounding states have actually had increases. So that’s really cool.”

Not so “cool” for everyone

Governor Snyder is referring to House Bill 5002 (2011). This legislation was pushed by special interest groups who wanted to pay less on workers’ compensation claims.

It allows insurance companies to reduce or stop benefits using phantom wages. It does not matter whether a person has actually returned to work. The safety net that many injured employees relied upon is now just a fantasy.

House Bill 5002 (2011) also makes the burden of proof so difficult that many people cannot win at trial. This is evidenced by 2013 statistics that show only 15 open awards and 54 denials. A sharp contrast from 2010 when there were 83 open awards and 92 denials. Statistics from the Appellate Commission are much worse.

Missing the point entirely

Michigan’s workers’ compensation law has been on the books for 100 years. It is a compromise of employer and employee interests. Employers get immunity from civil lawsuits. Employees receive medical treatment and some limited wage loss benefits. It represents a grand bargain between business and labor.

Special interest groups have always pushed workers’ compensation reform under the guise of job creation. Each Midwestern state in a fierce battle to lower its benefits to entice businesses to stay. No matter that outsourcing has already created a huge loss of manufacturing jobs and wages continue to stagnate.

Arguments about job creation are important but should not be done in a vacuum. Michigan needs a robust workers’ compensation system that treats all stakeholders fairly. Insurance companies should not be allowed to automatically reduce benefits simply because they say a person can work somewhere else. Keep the safety net in place and let magistrates make the determination.

Failed policies

Governor Snyder also signed “Right to Work” legislation during his first term. Backtracking from previous statements calling the issue too divisive.  When asked about its effectiveness:

“I couldn’t tell you a jobs number today … But are we getting a lot more consideration, is the pipeline filling up a lot more? The answer is absolutely yes.”

What about workers’ compensation reform? Is it really creating more jobs? We would love to hear from any employers who have actually seen their premiums drop 20% in the last three years.

It is also interesting to note that the pure premium rate fell under Jennifer Granholm. We saw a reduction of 11.2% in 2005. She attributed this drop to safety programs and better control of medical costs through fee schedules. In fact, it had declined 8 out of the 10 previous years. Not exactly a crisis that required such extreme and one-sided reforms.

To speak with our workers’ compensation lawyers in Michigan, call (855) 221-2667 for a free consultation.

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:

HB 5002 passes both State House and Senate

01/01/2014
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