Labor and Economic Opportunity
Employers Saving Nearly $500 Million Since 2011
Media Contact: LARA Communications 517-373-9280
October 22, 2018 – For the eighth consecutive year, Michigan workers and job providers will benefit from the Michigan’s workers’ compensation system as the state’s pure premium advisory rate for workers’ compensation insurance will decrease by 8.3 percent for 2019. Comparatively, the national average change in the rate was a decrease of only 0.7 percent.
Michigan has seen a decline in workers’ compensation pure premium rates every year since 2011 and will see an overall cumulative decrease of 49 percent from 2011-2019, saving employers an estimated $492 million in workers compensation premiums.
“Employers experience real financial savings from these declining rates,” said Workers’ Compensation Agency (WCA) director Mark Long. “This allows them to invest more in their business by hiring more employees and increasing salaries. These rate decreases play a pivotal role by continuing to add workers and businesses to the state's economy.”
In 2011, Gov. Rick Snyder signed legislation that reformed the state’s workers’ compensation system, including improvements for disability and post-injury earning capacity. These changes helped revamp a 100-year-old system and have played an integral role in reducing costs for employers, stabilizing the state’s system, and ensuring the promise to protect injured workers.
Pure premium rates are important in calculating employers’ and job providers’ overall expenses for workers’ compensation. The rates also factor into employer insurance claims that cover costs for work-related injuries. In a recent Workers Compensation Research Institute study Michigan had the lowest overall cost per lost-time claim amongst studied states.
The most recent comparison data also shows that Michigan’s cumulative pure premium decrease of 45 percent from 2011-18 is again best in the Midwest and third in the nation.
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.