Report Shows Michigan's Work Comp System with Lowest Costs

Report Shows Michigan's Work Comp System with Lowest Costs

Cost savings give employers resources to expand and create jobs

Media Contact: LARA Communications 517-373-9280
Email: mediainfo@michigan.gov

April 25, 2017 - A new national report shows Michigan’s stable and efficient workers’ compensation system continues to be a positive economic attraction asset, while still ensuring the protection of injured workers. Last year, the Michigan Workers’ Compensation Agency (WCA) ensured the proper payment of over $1 billion in benefits to Michigan workers hurt on the job. A recently released Workers Compensation Research Institute (WCRI) study compared workers' compensation claims and found Michigan’s average cost per claim was once again the lowest of the 18 states surveyed.

“The stability of our workers’ compensation system continues to safeguard Michiganders injured on the job. This new report also demonstrates that it remains an important economic factor for job providers looking to expand, hire more workers or move their operations here.” said WCA Director Mark Long. “We will continue to innovate our regulatory processes to protect workers and reduce costs for employers.”

WCRI’s CompScope™ Benchmarks for Michigan, 17th Edition reported:

• Total costs per claim with more than seven days of lost time decreased from 2009 to 2013 (claims with an average maturity of 36 months) as a result of multiple factors:
  • Shorter duration of temporary disability, a lower average lump-sum settlement per claim, and fewer settlements compared with previous years.
  • Overall frequency of litigation (measured as a percentage of claims with defense attorney involvement and/or medical-legal expenses) decreased.
• Medical payments per claim changed little in 2015. Prices paid for professional services decreased 5.1 percent following the updates to the medical fee schedule in 2014.
• The average total cost per claim with more than seven days of lost time in Michigan was the lowest of the studied states due to indemnity benefits and medical payments. This result was likely affected by a combination of system features.

In late 2011, Gov. Snyder signed sweeping legislation reforming the state's workers' compensation system. These improvements included defining disability and post-injury earning capacity, and have played an underlying role in the reduction of costs for our employers. The changes brought certainty to Michigan’s work comp system, ensuring the protection of Michiganders injured on the job and has helped put them back to work.

Michigan's injured workers and their employers are governed by the Workers' Disability Compensation Act. The Act was first adopted in 1912 and provides compensation to workers who suffer an injury on the job and protects employers' liability. The mission of the WCA is to efficiently administer the Act and provide prompt, courteous and impartial service to all customers.

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