Workers’ compensation costs per claim in Michigan were lower than that of the typical state, according to a recent study by Massachusetts-based Workers Compensation Research Institute, 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.
ˆThis story previously appeared in our sister publication Claims Journal.