Workers’ compensation rates decreasing again in 2015

An open letter to Crain’s Detroit Business regarding workers’ compensation reform.

Crain’s Detroit Business has reported the pure premium rate is dropping 6.5% starting January 1, 2015. Businesses have now seen a 27.7% reduction during the last four years.

Agency Director Kevin Elsenheimer attributes these savings to House Bill 5002. This legislation was signed by Governor Snyder in 2011. It introduced several controversial changes including allowing employers to get a credit for an individual’s “wage earning capacity.”

Crain’s Detroit Business says if a worker were to break a leg at his or her factory job, for example, rather than wait until it heals and return to work, now that employee might have to take a job at a call center.

This approach sounds reasonable but it does not work as advertised. Here is our open letter regarding workers’ compensation reform under House Bill 5002.

Open letter from Alex Berman

Dear Mr. Gautz,

Your article regarding workers’ compensation rate drops in Michigan was excellent.  There is one significant error, however: When you mentioned House Bill 5002, you state that: “If there is another job available that they could reasonable do, regardless of whether it is in their field of expertise, they have to take that job, or face a reduction in their benefits.”

The new law does not require that this hypothetical job be available to the injured worker.  As a matter of fact, the job often is not even available.  In practice, what insurance companies do to reduce wage loss benefits, is as follows:

The injured worker (who is already receiving wage loss benefits) is required to be “interviewed” by a vocational expert, retained by the insurance company/employer. The purpose is to evaluate the “residual wage earning capacity” of that employee.  In other words, determine what jobs they could perform, within their restrictions, based on their education, work history and any transferable skills.

This  results in a report,  issued by the so-called vocational “expert,” listing several jobs which the worker could possibly perform, within their medical restrictions. Also, the pay rate for these hypothetical jobs is determined.

Once the insurance adjustor receives this report, there is absolutely no effort to locate any of the jobs listed, or any other job.  At this point the pay rate for these jobs is instantly calculated, and the insurance company/employer immediately reduces the injured workers’ weekly wage loss benefit, pretending that they are actually performing these imaginary jobs.  There is no attempt give the injured worker an opportunity to apply for and obtain employment at the jobs. All that happens is that the weekly comp check is reduced.  Most people don’t even understand why this is happening.

The vocational expert can always identify low paying or entry level jobs.  If an injured worker was actually earning the same salary, when they were injured, THEIR WEEKLY CHECK IS REDUCED TO ZERO.  If the employee was fortunate enough to earn $15.00 to $20.00 an hour, their weekly comp check is reduced by a mere 50 to 80%.  At this point, they are not receiving enough to survive.

The premise of this portion of the new WC act, is to reduce benefits, or even eliminate them, based on a IMAGINARY job, which either does not actually exist within a reasonable distance from the employee’s home, or is just not available.  THE NEW ACT DISREGARDS THESE UNJUST RESULTS.  And at that point the insurance company/employer has no incentive to assist the injured worker in returning to the work-place.

I have been representing injured workers for 42 years. I have never seen such an unfair and disgraceful alteration of a law which originated 100 years ago, to protect injured workers, with reasonable wage loss benefits and proper medical care.

I see new clients on a weekly basis, whose wage loss benefits have been cut anywhere from 10% to 100%, without any effort by the insurance company/employer assisting them to find employment. Since many of these individuals have permanent restrictions, which prevents them from returning to their former line of work, they need to be re-trained or educated to again become employable. This is part of the WC Act, but is never offered by the employer or insurance company.  When I make that request, on behalf of my client, I pretty much get laughed at.

If you want specific cases and real people whose lives have been devastated by the new Act, please feel free contact me. You have no idea how much hardship and tragedy is resulting from the current state of the workers’ compensation law.

Sincerely,

Alex Berman

Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (855) 221-2667 for a free consultation today.

Related information:

Update: House Bill 5002 (workers compensation reform)

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