Wrangling continues over changes to workers comp in Michigan

LANSING, Mich.—For a couple of months, business and labor, and Democrats and Republicans, have squared off over a wide-ranging workers' compensation bill in the Michigan Legislature.

And as the business-backed bill heads toward action in the session's final weeks, disputes remain.

Business groups say House Bill 5002, which revises Michigan workers compensation law in a number of areas, will provide more certainty and clarity to an area that's seen varying Michigan Supreme Court interpretations and will improve Michigan's business climate.

But labor unions and others say the legislation overreaches, to the detriment of injured workers.

One issue has to do with the definition of disability. Current law defines disability as a limitation—resulting from a personal injury or work-related disease—of an employee's "wage earning capacity" in work suitable to the person's qualifications and training.

Under the bill sponsored by Rep. Bradford Jacobsen, R-Oxford, wage earning capacity would be the wages that the employee earns or is capable of earning at a job reasonably available to that employee, whether or not the wages are actually earned. It also would not restrict "suitable work" to the specific field that the employee worked in before his or her injury.

For example, a carpenter injured on the job must not only prove that he or she cannot perform duties as a carpenter, but also cannot perform a different job. The employer would have to prove that jobs which the employee could do exist and are available.

That means workers' comp benefits could be reduced based on theoretical wages, opponents say.

"Someone's disabled, and you're going to hold against them a wage that they don't have," said Mark Docherty, president of the Michigan Professional Fire Fighters Union. "We have no problem with the requirement to find a job, and have no problem with the fact that when you get a job it comes off your compensation. But they want to go further."

Delaney Newberry, director of human resource policy at the Michigan Manufacturers Assn., said the language reflects Supreme Court workers' comp decisions that recognized "jobs that you are able to do." She said there's also an expectation that employees should return to the workforce if they are able.

Mr. Docherty said "most people want to work, and they do make efforts to work. They're trying to address some abuses of the system by punishing everybody."

There's similar argument over language that allows workers' comp benefits to be reduced by a pension that a retirement-eligible worker could receive, even if that worker has not retired and is not drawing a pension.

In testimony submitted to Senate committee, United Auto Workers International Union lobbyist Tim Hughes said that a worker might not want to retire or can't afford to retire, but if they get injured on the job they "could see their worker compensation benefit greatly reduced or wiped out altogether to offset a pension that they don't receive. They may have to retire, just to put food on the table."

Ms. Newberry said "we're not forcing anybody to retire." But under current law, workers' comp benefits are reduced, or coordinated, with actual pension amounts received.

"There should be coordination of benefits, just like there is for the individual who does elect to retire," she said.

Another issue is the length of time for which an employer can control the injured employee's medical care. Employers by law are required to provide reasonable medical, surgical and hospital services to injured employees, and for the first 10 days of medical care, the employer can choose who will provide that treatment.

House Bill 5002 initially lengthened that period to 90 days; it was set at 45 days in the House-passed version now in Senate committee.

An employer "has to pay for medical benefits for the life of the claim," so the widened window allows more control to ensure the best treatments and care are followed, "so that they can return that person to work as soon as possible," said Wendy Block, director of health policy and human resources at the Michigan Chamber of Commerce.

But opponents say getting injured workers healthy is a reason to keep the 10-day time frame and allow workers more rapid treatment by their own physicians.

In the House, Democrats unsuccessfully offered bill amendments that included allowing a worker to seek a second opinion from another doctor during the 45-day time frame, and more narrowly defining wage earning capacity. The bill is before the Senate Reforms, Restructuring and Reinventing Committee.

Michelle Muñoz contributed to this story.

Amy Lane is a writer for Crain’s Detroit Business, a sister publication of Business Insurance.