Dispelling the myth of high employer costs and changing attitudes about workers’ compensation through statistics.
ProPublica, an independent and non-profit newsroom, has released a fascinating report about workers’ compensation costs. Its investigation found employers nationwide are paying some of the lowest rates in the last 25 years. This was based upon the average premium cost to employers for every $100.00 of wages.
For example, employers nationwide paid an average of $1.85 per $100.00 of wages in 2014. This represents a 59 percent drop since 1988. Michigan employers paid $2.36 per $100.00 of wages in 2014. This is an 82 percent drop since 1988.
Michigan is a large state with a significant manufacturing base. We have now seen a 27.7 percent drop in the pure premium rate over the last four years. This has saved employers an estimated 277 million dollars.
A recent study from the National Academy of Social Insurance (NASI), a nonprofit and nonpartisan organization, showed -24.9 percent growth in total benefits paid during a five year period between 2009 and 2013. This occurred despite 4.6 percent growth in covered workers during the same period of time.
WCRI, a not-for-profit research organization, conducted a 17-state survey covering nearly 60 percent of the nation’s workers’ compensation market. It found indemnity benefits in Michigan per claim were 22 percent lower than the typical study state. Medical benefits per claim were also 34 percent lower, and benefit delivery expenses per claim were 21 percent lower.
Where is the real crisis?
Special interest groups would have you believe that workers’ compensation is too expensive and “job creators” need more protection to be competitive. Don’t believe the hype!
Legislative amendments in 2011 permit insurance companies to reduce benefits using a hypothetical “wage earning capacity.” This means weekly checks can be stopped when they decide work is available within a person’s restrictions. It does not matter whether real wages are actually paid.
It’s time for our elected representatives to put Michiganders ahead of special interests groups and fix the system. We need a change of attitude when it comes to protecting this important safety net.
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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