How self-insured employers are making out like bandits under new Michigan workers’ comp rules.
Branch County has received a dividend in the amount of $82,393 from the Michigan Counties Workers’ Compensation Fund (MCWCF). This refund is from a $117,000 payment into the pooled self-insured fund to cover the county’s workers’ comp insurance for last year.
We have been critical about workers’ reform since its passage in 2011. It allows weekly benefits to be slashed if a person has a “wage earning capacity.” The problem is that employers and insurance companies make this calculation on their own. It does not matter whether a disabled employee actually finds a new job or is earning real wages. One of our clients saw his weekly checks cut from nearly $500 to $19.
The pure premium rate has now fallen more than 32.7% since 2011. Projections for 2017 show another 9.3% decline. It is estimated that Michigan businesses have saved nearly $400 million.
Large employers who can afford to be self-insured have done even better. It is no secrete these groups pushed hard for workers’ comp reform. According to a recent study published by the National Academy of Social Insurance (NASI), 39.1% of total benefits were paid by self-insureds.
What about small business owners who create the majority of new jobs? We think insurance companies are just profit taking and not passing savings on to employers. We even suggested a social media campaign using #WorkCompRefund to demand money back. Businesses were encouraged to tweet their premium rate increase/decrease. Are they really seeing a 40% reduction?
We are glad employers are saving money on workers’ comp. But what about the human cost? Maybe it is time we roll back some of these reforms and focus on the people who are actually hurt.
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.
Photo courtesy of Creative Commons, by kenteegardin.