Who pays for a 28% reduction in premiums?

The truth about “wage earning capacity” and phantom wages.

phantomflowchartInsurance Journal recently published an article regarding dropping workers’ compensation costs in Michigan. It mentions the premium rate going down 28% in the last three years and how employers have saved $277 million dollars. This is not new information for anyone who reads our blog.

The article goes on to say: “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.”

I don’t know where Insurance Journal is getting this information but it’s not an accurate representation of current law. Employers have always been able to stop payment of wage loss benefits if a person refuses a job within restrictions.

Amendments in 2011 permit employers to stop weekly checks if a person simply has a “wage earning capacity.” It no longer matters whether a real job has been offered.

Think of wage earning capacity as the ability to earn money in another job. The problem is that insurance companies make this determination on their own. A labor market survey is performed and a list of jobs is complied. Phantom wages are then used to offset weekly checks.

One of our clients was disabled from her job as a nurse. She was told by her employer that lots of alternate positions exist but not with their hospital. Her weekly benefits were cut-off leaving her with no income.

We have created a flow chart to demonstrate how absurd the workers’ compensation system has become. Check it out above.

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.

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