Math error not in your favor

Insurance company makes $8,500 error and how to double check your comp rate.

6736194099_eb2ac3f1bb_mNever assume an insurance company is paying the correct comp rate. We see individuals who are receiving much less than required under Michigan law. Just last week an $8,500 error was discovered. Turns out the insurance company had been shorting our client by $160.00 per week.

A person is generally entitled to 80% of their after-tax average weekly wage. These comp payments should continue for the entire period of disability. Errors are commonly made when applying various offsets.

Here is some information that you should know when calculating your comp rate. Please remember that every situation is different and it is best to have a workers comp lawyer review your claim.

Comp Rate

Calculating the average weekly wage is very simple. Add up the highest 39 paid weeks in the 52 before you got hurt. Divide the total number by 39 to get an average amount. Remember to include overtime, premium pay, and bonuses when selecting the highest weeks. Sometimes the value of discontinued fringe benefits can also be included. Wage records should be provided by the employer.

Tables published by the State of Michigan will establish your comp rate based upon tax filing status and number of dependents. Just use the appropriate columns and the chart will give you an amount.

Social Security

Social Security pays benefits to people who have reached retirement age or suffer from a disability. This is an important distinction because only retirement benefits are allowed to be coordinated. An insurance company can use 50% of Social Security retirement benefits as an offset. Social Security disability benefits cannot be coordinated.

Social Security disability benefits are typically converted to retirement benefits at a specific age. The retirement age depends upon the year you were born. For some people it is age 65 while others must wait until 67.

Insurance companies make mistakes when they attempt to coordinate Social Security too early. Watch out for any reductions if you are only receiving Social Security disability benefits.

Wage Earning Capacity

The issue of “wage earning capacity” has caused significant controversy in the workers comp system. It permits insurance companies to use “phantom wages” to calculate the comp rate. The idea is that a person is only partially disabled and can find alternate employment. Instead of paying 80% of the average weekly wage, insurance companies get an offset for jobs a person could theoretically perform somewhere else. But it does not matter whether the person is actually employed or earning real wages.

This provision is ripe for abuse. We have seen insurance companies tell people to find jobs in fields totally unrelated to their qualifications and training. Labor market surveys often include inflated salaries and jobs that don’t even exist. If your comp rate has been reduced based upon wage earning capacity, you should contact an experienced workers comp lawyer immediately.

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:

Video: Injured at work? Advice from a Michigan workers comp lawyer

Photo courtesy of Creative Commons, by 401(K) 2013.

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