Reform efforts have resulted in less workers’ comp benefits paid and huge cash savings for employers.
We recently blogged about an Insurance Journal article discussing how Trump policies could lead to a 300% increase in workers’ comp costs during the next decade. Labor shortages and weakening of the Affordable Care Act were just some of the issues discussed. It was argued that politics in our country has become so polarized that state governments would be unable to adapt.
It is hard to imagine such a dire prediction coming true. Protecting job creators is the driving force of workers’ comp reform in many states. Michigan lawmakers passed significant changes in 2011 resulting in less benefits and a huge drop in the pure premium rate.
The Department of Licensing and Regulatory Affairs (LARA) announced a 9.3% decline in the pure premium advisory rate for 2018. It has now dropped 45% since 2011 saving employers an estimated $446 million. This outpaces all Midwestern states and is top five in the nation.
Reducing costs for employers is a good thing but it does not happen in a vacuum. Medical treatment is shifted to other payers like group health insurance, Medicaid, and Medicare. Food stamps and SSI payments substitute for wage loss benefits. If we remove these additional safety nets, injured workers are going to suffer even more.
Workers’ comp is supposed to be a compromise of interests. It is a grand bargain between employers and employees. Keeping employer costs low is important but it should not be the only consideration. It is time to ask whether workers’ comp is still a “fair deal” in Michigan.
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 (844) 316-8033 for a free consultation today.