Michigan employers save estimated $446 million on workers’ compensation costs as pure premium rate continues to fall.
The Department of Licensing and Regulatory Affairs (LARA) has announced the pure premium advisory rate for workers’ compensation insurance will drop by an average of 9.3% for 2018. Employers have now seen a 45% drop since 2011 and estimated savings of $446 million.
Comparison data shows Michigan’s cumulative pure premium decrease outpaces all Midwestern states and is top five in the nation. The national average increased by 4.9%. LARA attributes these savings to reforms signed into law by Governor Rick Snyder in 2011.
Who pays for a 45% premium reduction?
Michigan law now permits insurance companies to use wage earning capacity when calculating the compensation rate. Think of wage earning capacity as the ability to earn in another job. Insurance companies make this determination on their own using a labor market survey. Phantom wages are then used to offset weekly disability checks.
Special interest groups have been using the same tired argument about protecting job creators for years. This has led to workers’ compensation reform and massive benefit cuts. A 45% drop in the pure premium rate does not happen in a vacuum.
One of our clients saw his disability checks drop from $481 to just $19 per week. A vocational expert said he could earn wages despite suffering from permanent nerve damage and being out of the labor market for nearly ten years. He was also battling cancer at the time his benefits were reduced.
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) 201-9497 for a free consultation today.
Photo courtesy of Creative Commons, by Images_of_Money.