Lansing, MI – Michigan workers and job providers continue to benefit from Michigan’s workers’ compensation system as the Department of Licensing and Regulatory Affairs (LARA) announced today that the pure premium advisory rate for workers’ compensation insurance will drop by an average of 9.3 percent in 2017. The rate has decreased 39 percent since 2011, saving Michigan employers an estimated $390 million1.
The most recent comparison data shows that Michigan’s cumulative pure premium decrease of 32.7 percent from 2011-16 is best in the Midwest and top five in the nation. While Michigan’s rate plummeted, the national average increased 7.1 percent2.
In late 2011, Gov. Rick Snyder signed sweeping legislation reforming the state’s workers’ compensation system. The improvements defined disability and post-injury earning capacity, and have played an underlying role in the reduction of costs for Michigan employers. The changes stabilized the 100-year-old system, ensuring the promise of compensation for injured Michigan employees.
Last year, the Michigan Workers’ Compensation Agency (WCA) ensured the proper payment of more than $1 billion in benefits to Michigan workers injured on the job. A 2014 Workers’ Compensation Research Institute study found that 79 percent of injured Michigan workers were satisfied with their medical care.
“Our workers’ compensation system has ensured the protection of injured Michiganders, while creating the right regulatory environment for economic growth,” said Gov. Rick Snyder. “These savings allow Michigan companies to hire more workers, increase salaries and expand operations. Our system also gives us another economic asset over other states in attracting new job providers.”
The pure premium is important in determining a job provider’s overall expenses for workers’ compensation and it is also a major factor when it comes to an employer’s insurance premium that also pays for the anticipated claims costs for work-related injuries.
“The 2011 reforms have steadily improved our cost containment efforts for businesses and have allowed us to continue to protect Michiganders injured on the job,” said WCA Director Mark Long. “The WCA is focused on continuing to improve our regulatory processes while protecting Michigan workers.”
The WCA’s emphasis on reducing costs for job providers has included the administering of a well-developed fee schedule which controls medical costs for work-related injuries. A recent study showed Michigan had the lowest cost per claim in the country.
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.
1 Compensation Advisory Organization of Michigan, Analysis of Premiums, 2016
2 National Council on Compensation Insurance, Annual Statistical Bulletin, 2016
Source: MI LARA