Michigan Workers’ Compensation Costs Lower Than Most States, Says WCRI Study

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A recent WCRI study, CompScope™ Benchmarks for Michigan, 15th Edition, compared workers' compensation claims in Michigan with those of 16 other states. The study found costs per claim in Michigan were lower than that of the typical state with average claim size falling over a three-year period.

State of Michigan
Between 2008 and 2011 (claims evaluated as of 2014), indemnity benefits per claim decreased 12 percent, benefit delivery expenses per claim decreased 5 percent, and the average medical payment per claim rose 9 percent.

Workers’ compensation costs per claim in Michigan were lower than that of the typical state, a recent study by the Workers Compensation Research Institute (WCRI) said, with average claim size falling over a three-year period.

The WCRI study, CompScope™ Benchmarks for Michigan, 15th Edition, compared Michigan claims in which workers missed seven days or more of work with those of 16 other states.

After 36 months, the average 2011 Michigan claim was 4 percent lower than similar claims from 2008. That was the largest decrease of all states WCRI studied. The typical state’s claim costs rose 8 percent over that period.

Between 2008 and 2011 (claims evaluated as of 2014), indemnity benefits per claim decreased 12 percent, benefit delivery expenses per claim decreased 5 percent, and the average medical payment per claim rose 9 percent.

All three cost components were below the median of the 17 states WCRI studied. Indemnity benefits per claim were 22 percent lower than the typical study state. Medical benefits per claim were 34 percent lower, and benefit delivery expenses per claim were 21 percent lower.

In 2011, Michigan enacted major legislation with the objective of reducing workers’ compensation costs. Public Act 266 defined disability and post-injury wage-earning capacity consistent with Michigan Supreme Court rulings. It also extended the number of circumstances under which benefits could be terminated, extended employer control over the use of medical care, and made other changes. The law applies to injuries occurring on or after December 19, 2011, but prior Supreme Court decisions may have affected costs before the law was enacted.

To purchase a copy of this study, click on the following link: http://www.wcrinet.org/studies/public/books/BMcscope_multi15_MI_book.html.

The Cambridge-based WCRI is recognized as a leader in providing high quality, objective information about public policy issues involving workers' compensation systems.

ABOUT WCRI:

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Organized in late 1983, the Institute does not take positions on the issues it researches; rather, it provides information obtained through studies and data collection efforts, which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures. WCRI's diverse membership includes employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia and New Zealand.

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Andrew Kenneally
Workers Compensation Research Institute
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