Job Generator: Michigan Workers’ Compensation Rates Decline


Pure premium advisory rates for workers’ compensation insurance — the portion of an employer’s insurance that pays for the anticipated claims costs for work-related injuries — will drop by an average of 8.3 percent in 2014, state officials said Tuesday. Since Gov. Rick Snyder signed legislation reforming the state’s workers’ compensation system in 2011, that rate has dropped by more than 21 percent.

 “This sizeable decrease in workers’ compensation rates gives Michigan a real competitive edge over neighboring states in attracting and retaining businesses,” says Steve Arwood, director of the Michigan Department of Licensing & Regulatory Affairs. “Workers’ comp premiums are overhead costs. These savings can free up additional capital for companies to hire new employees and open additional facilities, or give them one more reason to move to Michigan.”

The annual rate is developed and approved by the independent Data Collection Agency Board, which analyzes historical loss information combined with regulatory reforms, including the 2011 legislation that defined disability and post-injury earning capacity. The reforms have played an underlying role in the reduction of costs for the state’s employers, say government officials.

 “With the help of these legislative reforms, the Workers’ Compensation Agency has been squarely focused on containing costs for employers and protecting injured workers,” says Kevin Elsenheimer, director of the agency. “We will continue to examine every aspect of our regulatory program to ensure our system supports growth for our business customers.”

Elsenheimer says the agency’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.

Through a reduction in forms and improvements in technology, Elsenheimer says the agency will soon announce improvements in processing times for business customers.