By Donna Motley, Vice President of Claims

Employees are often eligible for multiple benefits with their employer. Workers’ Compensation coverage is mandatory in the State of Michigan. Optional benefits may be Short Term Disability (STD), Long Term Disability (LTD), Sick Time, Personal Time Off (PTO), Family Medical Leave (FMLA).

Of these programs, FMLA is “unpaid” with time limited to 12 weeks away from work, but the employee’s job is “protected” – meaning a position is to be available to the employee at the end of 12 weeks at the same rate of pay and same benefits.

STD and LTD generally pay a percentage of the employee’s wages. Of the STD cases I have seen (and handled), the employee has been paid approximately 65% of their wages. STD is generally limited to a set number of weeks, and LTD may or may not have a time limit (but again, recipients are paid at a lesser rate of pay).

Sick Time and PTO may or may not pay for days missed and generally have a time limit of eligible days that can be taken.

Workers’ Compensation pays approximately 80% of the employee’s net wages and has no time limit. As a case in point, the employee with the oldest claim in our office was injured in 1977 and passed away (not from the work related injury/condition) in April of this year. The employee collected benefits for approximately 41 years. We paid related medical bills for 41 years – there was no co-pay or deductible to the injured worker. Granted, the injured worker was being paid at a 1977 Workers’ Compensation rate, and it was reduced to 50% because of collecting old age Social Security. The employer (our insured) has long been out of business so we have no premium to recoup on the claim.

If an employee is involved in a motor vehicle accident in the regular course of their employment, Workers’ Compensation benefits take precedent over the vehicle insurance coverage. The employee cannot double dip. Negligence is not a factor in Workers’ Compensation – it doesn’t matter if the employee didn’t use their best judgment and the result was an accident and/or injury. However, Workers’ Compensation can control medical treatment and the cost of same, where an auto carrier cannot. With no limit on medical treatment, this can be an important factor.

Workers’ Compensation does not pay for “pain and suffering” and rarely pays for “replacement” services. Workers’ Compensation does not “guarantee” the employee that their job or “any” job will be available once the employee is recovered and released to return to work. Workers’ Compensation can, when appropriate, mandate the employee look for work and reduce their benefits accordingly.

The weekly maximum rate for Workers’ Compensation benefits generally changes annually. The rate is set by the State of Michigan and is based upon 2/3 of the State Average Weekly Wage. For 2018, the maximum rate anyone could receive is $900.00 per week, tax free. So you can see why an employee may try to make a “non-work” related condition “work related”; chances are the employee would receive a higher weekly wage replacement, have no out of pocket expenses and no limit on the length of time benefits can be collected – on LEGITIMATE and accepted claims.

So, this is yet another reason why we deeply investigate claims. As an employer you may find it annoying that we ask for so much information or ask so many questions, but it is because we want to pay the legitimate claims, provide a successful recovery for your employee, keep costs reasonable and save, you, the employer, money on your premiums!