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Benefits

• Wage Loss Benefits. Generally, an employee's wage loss benefits are equal to 80% of the after tax value of his or her average weekly wage, subject to certain minimum and maximum limits. The average weekly wage is determined as of the date of the injury. If, as a result of the injury, an employee returns to a lower-paying job, he or she may be entitled to wage loss benefits based on a percentage of the difference between the wages earned at the date of the injury and the wages of the new job. No benefits are paid under the Act for any injury which does not incapacitate the injured employee from earning full wages for a period of at least one week. If the incapacity extends beyond the period of one week, compensation shall begin on the eighth day after the injury. If incapacity continues for two weeks or longer or if death results from the injury, the compensation will be computed from the date of the injury. Unlike other personal injuries, an individual injured in the course of their employment does not receive any compensation for pain and suffering, loss of function, loss of enjoyment of life, or any other type of economic or non-economic damages.
  • Average Weekly Wage.
    • An employee's benefits are based on his or her earnings at the time of the injury. This is referred to as the "Average Weekly Wage." If the wages vary from year to year, the highest 39 of the last 52 weeks are used to calculate the average weekly wage. If an individual worked less than 39 weeks before the injury, we use the average of the weeks actually worked. If an individual was injured in the middle of the week, and had only worked for a brief period of time, then the Average Weekly Wage would be calculated in a manner not to adversely affect an individual who either started work in the middle of a week, or was injured in the middle of a week, and thus, did not complete a full week of work.
    • The value of fringe benefits that do not continue are added to cash wages to determine the Average Weekly Wage as long as the resulting amount does not exceed two-thirds of the State Average Weekly Wage.
  • Maximums and Minimums.
    • Maximum Benefits. The Act has always provided for maximum limits on weekly benefits. Effective January 1, 1982, the Act was changed to provide a maximum rate equal to 90% of the State Average Weekly Wage. The maximum no longer depends on the number of dependents. Each year the Agency sets the maximum rate of workers' disability compensation benefits.
    • Minimum Benefits. Effective January 1, 1992, there are no minimum weekly benefits for total disability. However, a minimum weekly death benefit provides 50% of the State Average Weekly Wage. A minimum weekly benefit for specific loss and for total and permanent disability provides 25% of the State Average Weekly Wage.
  • Specific Loss.
    • In addition to general disability benefits, the Act provides a specified number of weeks of benefits for specific losses. The benefits are payable for the period of time specified, regardless of whether the injured employee returns to work, and regardless of whether he or she would be found to have a general disability as a result of the loss. When the specific loss period ends, the injured employee may or may not be entitled to continuing general disability benefits depending on whether he or she meets the general disability requirements. If an injured worker sustains successive losses of two or more members, benefits are paid consecutively, rather than concurrently. Payment of the specific loss benefit begins at the time that hope of restoring the member is abandoned.
    • If an injured worker sustains an anatomical loss, then they satisfy the specific loss requirements. However, an individual may also satisfy the specific loss requirement if he or she demonstrates that they have "loss of industrial use" of a specific member. This is decided on a case by case benefit.
    • The loss of the first phalange of any finger is considered to be equal to loss of one-half of that finger. Although there is no clear rule as to what establishes a degree of anatomical loss, generally, if an individual loses part of the bone it is considered loss of that phalange.
    • The scheduled losses are as follows:

      Thumb	65 weeks
      First Finger	38 weeks
      Second Finger	33 weeks
      Third Finger	22 weeks
      Fourth Finger	16 weeks
      Great Toe	33 weeks
      All Other Toes	11 weeks
      Hand	215 weeks
      Arm	268 weeks
      Foot	162 weeks
      Leg	215 weeks
      Eye	162 weeks

  • Dependency.
    • The amount of benefits in a disability case may be affected by the number of dependents an injured worker has; but, all benefits are paid to the worker. In death cases, dependency determines not only the amount of benefits, but also who will receive them, and whether there will even be any benefits payable.
    • The spouse of an injured worker, living with the worker, as such, at the time of the injury, is considered to be a dependant. A child under the age of 16, or over said age, if physically or mentally incapacitated from earning, living with his or her parent at the time of the injury of such parent, is considered a dependant. Except as those conclusively presumed to be dependents, no person shall be deemed a dependant who receives less than one-half of his or her support from the injured worker.
  • Duration of Benefits.
    • Section 311 of the Workers' Disability Compensation Act provides that no compensation benefits are paid for an injury that does not last at least one week. If the disability lasts beyond one week, the injured worker is entitled to benefits beginning on the eighth day after the injury. If the disability continues for two weeks or longer, then the worker is entitled to paid compensation beginning with the date of injury.
    • Benefits continue as long as an injured worker satisfies the requirements for loss for injury and loss of wage earning capacity. However, at age 65 benefits are reduced 5% per year until an individuals 75th birthday, for those injured workers who qualify for social security retirement benefits. At that time, the benefits have been reduced by 50%. They continue at that level for the remainder of an individual's life. However, see page 10 for an alternative reduction option available to the employer (which is usually more favorable to the employer).
  • Partial Compensation. If an individual returns to work at wages equal to or greater than their average weekly wage at the time of the injury, benefits stop. However, if an individual returns to a lower paying job, he or she receives benefits equal to 80% of the difference between the after tax value of the average weekly wage before the injury and the after tax value of the wage earned after the injury.
  • Supplements. The one-time increase in benefits for workers with injury dates between September 1, 1965 and December 31, 1979, was part of the 1980 Amendments. The increase was intended to compensate those injured workers for the fact that they had been held to a constant rate of benefits in the place of substantial inflation. These workers' basic compensation rates were multiplied by a specified inflation factor, limited to a maximum of 5% per year.
  • Coordinated Benefits.
    • Section 354 of the Act provides that workers' disability compensation benefits shall be "coordinated" with other benefits that the worker receives from the same employer. The workers' disability compensation benefits are reduced by the after tax value of the other benefits to the extent that the employer paid for those benefits.
    • Unemployment Compensation. There is a dollar for dollar coordination between MESC benefits and workers' disability compensation benefits. In other words, every dollar that is received in unemployment benefits can be reduced from the amount that is due under workers' disability compensation benefits. This offset only applies if MESC benefits are attributable to the same employer.
    • Social Security. Workers disability compensation benefits are not effected by an individual's receipt of social security disability benefits. However, social security retirement benefits do result in a reduction of workers' disability compensation benefits. Under Section 354 of the Michigan Workers' Disability Compensation Law, an employer is allowed to reduce the amount of the workers' disability compensation benefit by 50% of the social security retirement benefit. Therefore, generally we do not advise workers' disability compensation claimants to file for early social security retirement, because only the workers' disability compensation carrier (employer) will benefit from the early filing. The theory behind this is that the employer paid for half of the FICA taxes ultimately producing the social security retirement benefit. It should also be pointed out that under the Federal Social Security Law, workers' disability compensation benefits are subtracted (under a special formula) from social security disability benefits. This rule applies to people who are under age 65. Basically, the Social Security Administration will reduce the social security disability benefit so that the combination of workers' disability compensation benefits and social security disability benefits do not exceed 80% of the "average monthly earnings" (this phrase is specifically defined in the regulations). Thus, those individuals who had a very high "average monthly earnings" calculation under the Federal Rule, may still be able to receive full workers' disability compensation and full social security disability benefits. Also, some people who settle (redeem) their workers' disability compensation case and include special appropriate language approved by the workers' disability compensation magistrate, may reduce the offset that the Social Security Administration otherwise imposes.
    • No-Fault Benefits. An individual's receipt of no-fault automobile insurance benefits has no effect on the individual's right to workers' disability compensation benefits. However, on the other hand, the receipt of workers' disability compensation benefits does have an effect on no-fault benefits. Generally, the automobile no-fault carrier will receive credit for any benefits paid by the workers' disability compensation carrier. If an individual receives both workers' disability compensation benefits and social security disability benefits, the no-fault insurer may reduce benefits by the amount of both types of benefits.
    • Retirement Pensions (Early and Normal). Under MCLA 418.354, the employer (workers' disability compensation carrier) can reduce the amount of your workers' disability compensation benefit by the after tax portion of any age based retirement (whether it's early or normal) to the extent the employer contributed to the pension. Thus, here again, generally we do not advise workers' disability compensation claimants to seek an early age based retirement pension.
    • Disability Pension Plans. If the disability pension is funded by the employer, then there will be coordination. If an individual has a personal disability insurance plan, that amount is not coordinated, since the employer has not made any contribution to the plan.
• Medical Benefits.
  • Right to Treatment. The employee has the absolute statutory right to treat with whatever physician he or she chooses. However, the employer does not have to pay for the physician that the employee chooses if the employer has offered a company selected physician. This limitation on payment of medical benefits, however, only applies during the first ten (10) days after injury. Thus, if the employer offers a company selected physician and the injured worker chooses to treat elsewhere, the employer still has to pay all the medical treatment after ten (10) days have passed since the injury.
  • Refusal of Treatment or Failure to Follow Medical Advice. If an injured worker refuses medical treatment or fails to follow medical advice, then he or she may lose the right to continuing benefits in certain situations. If a treating physician is recommending a procedure which has a low risk of harm and an individual refuses the procedure, that may affect the receipt of benefits. In the same manner, if a physician considers the risk of a procedure to be greater than the likelihood of success, then an individual cannot be forced to proceed with the treatment.
  • Right to Choose a Physician.
    • Theoretically, an injured worker should give statutory notice to the employer of the name of the physician with whom they wish to treat. The reality is that seldom is lack of such notice ever used as a defense to the entitlement for reimbursement for such medical treatment. The statute also provides that the employer may object to the selection made by the worker. Then, the employer may file an application with the Agency and show why the worker should not continue treatment with that physician. In reality however, the employer seldom files such an application. Instead, they just don't pay the physician's bills, thus, forcing the injured worker to file a petition to seek payment
    • Rehabilitation Nurse (Medical Management). On occasion the employer or the insurance carrier will assign a so-called rehabilitation nurse to the injured worker. The injured worker does not have to allow the nurse to accompany him or her to their doctor's office or sit in on the examination. The injured worker merely needs to advise the nurse that he or she is not authorized to attend the examination and is not authorized to meet the individual at the physician's office. The reason employers/insurance companies often hire rehabilitation nurses is to subtly impose "managed care". There is no provision in the Workers' Disability Compensation Act specifically granting to the employer the power to "manage the medical treatment". Indeed, just the opposite is in the Act. The employee has the absolute right to choose where he or she wishes to treat. The only statutory limitation in medical treatment is that it must be reasonable and necessary. To get around this, employers/insurance companies hire rehabilitation nurses. Although some of these nurses do genuinely proceed with the injured person's best interest in mind, too many of them, at the expense of the employee, tend to "steer" the patient to employer "friendly" doctors or to bother the doctor until the doctor gives in and reduces or eliminates the medical restrictions (perhaps earlier than the doctor would have liked). Although theoretically an employee does not have to work with a medical management rehabilitation nurse, if the worker blatantly refuses to cooperate with such a nurse, too often an insurance company will terminate benefits in a knee jerk reaction. Thus, sometimes it's best to cooperate with reasonable aspects of the rehabilitation nurse's requests.
  • Cost Containment. Under the Workers' Disability Compensation Law, Michigan medical providers can charge no more than the amounts specified under the Workers' Disability Compensation Cost Containment Regulations. After the maximum allowable payment is made towards the medical bill under the cost containment regulations, the physician is not allowed to recoup the unpaid balance from the injured worker. That excess must be "written off". Initially, physicians were upset about this provision. Now they are generally used to it (probably because they are experiencing similar economic pressures in most other areas too).
  • Nursing Care. If an injured worker needs nursing care or attendant care as a result of a compensable injury, and receives it from a paid professional nurse or semi-skilled attendant, the employer is responsible for the reasonable costs. If the care is provided by a family member, the attendant or nursing care shall not be ordered in excess of 56 hours per week. It is generally held that a family member is entitled to be paid at the same hourly rate as an outsider, such as a nurses aid. Payment is at the regular rate for 40 hours per week and at time-and-a-half for hours over 40.
• Vocational Rehabilitation
  • One of the goals of the Workers' Disability Compensation Act is to rehabilitate and return the worker to gainful employment. Hopefully, an individual worker will be able to return to his or her former job, or to other jobs with their former employer. If an individual, because of the work related disability, is unable to return to his or her former employment, then vocational rehabilitation may come into play. Although the Act does not specifically define what is involved in vocational rehabilitation, the employer may be required to provide up to fifty-two weeks of vocational rehabilitation training, treatment for service, and may be required by the director to provide an additional fifty-two weeks if appropriate. If a worker unjustifiably refuses to accept rehabilitation, it may affect the receipt of his or her benefits.
  • If an individual desires rehabilitation, they may file an Application for Mediation or Hearing requesting rehabilitation. A hearing would then be heard regarding this matter.
  • Sources of Vocational Rehabilitation. In many instances an individual rehabilitates him or herself by finding new employment. There are many private vocational rehabilitation agencies and state agencies that provide rehabilitation to injured workers'.
  • Disputes. Often, disputes arise as to whether a particular course of rehabilitation or training is appropriate, whether the injured worker may absent him or herself from the marketplace in order to pursue a particular course of training, or whether vocational rehabilitation training will enable the employee to be restored to useful employment. In many instances, there is a disagreement between the employer and the injured worker as to a particular rehabilitation plan. In those instances, either party may file an application asking for vocational rehabilitation.
  • Procedures. If the parties are unable to agree, an application is filed with the Workers Compensation Agency. The Director will refer the dispute to a Deputy Director or a Mediator, who will then schedule a hearing. This is not a formal hearing, as the normal rules of evidence and procedure are not followed. The Hearing Officer may rely on the records and reports that are not formally introduced into evidence or incorporated into the record in any formal manner. The Hearing Officer will attempt to bring the parties to an agreement about the best course of rehabilitation for the workers. If an agreement cannot be reached, the Deputy or Mediator will enter an Order. If either party disagrees with the Order, it may be appealed to a Magistrate for a more formal hearing.
  • Certified Vocationally Handicapped Worker. If an employer hires a Certified Vocationally Handicapped Worker, the employer limits its liability. Workers who suffer from impairments of the back or heart, or are subject to epilepsy or diabetes, may apply for certification. The certification applies to newly hired workers. Before being hired, the worker must obtain a certificate from the Michigan Rehabilitation Services, documenting the handicap. The certificate is presented to the employer before the worker is hired. The employer must report the hiring to the Michigan Rehabilitation Services within 60 days of hiring. If all of the requirements are satisfied, and the employee later suffers a compensable injury, the employer's liability is limited to 52 weeks of paying benefits. However, the employee still receives his or her full benefits after the 52 weeks, because thereafter, the Second Injury Fund assumes all responsibility for wage loss and medical benefits. In the mid-90's, a requirement was made that a worker obtain a signature on a form from an employee who had refused to hire the worker because of his or her disability before certification could be obtained. As expected, many employers are hesitant to request a worker to obtain certification, fearing that such a request might in itself be illegal discrimination. However, case law indicates that such a request does not, in itself, constitute prohibited discrimination.