Michigan Governor Poised to Sign Significant Workers’ Compensation Legislation

Indications are that Michigan Governor Rick Snyder will soon sign legislation that makes significant modifications to the state’s workers’ compensation law. H.B. 5002, introduced by state Representative Brad Jacobsen (R-Oxford), and presented to the governor on December 16, includes a number of important changes to Michigan’s workers comp law.

Included among the changes is a provision that requires, as a condition of compensability, that the injury be “medically distinguishable” from the employee’s prior condition. Currently, mental disabilities and conditions of the aging process, including heart and cardiovascular conditions, are compensable if contributed to or aggravated by the employment in a significant manner. The bill would include degenerative arthritis as a condition of the aging process. Other significant modifications of law include the following: 

• An employee’s weekly benefits must be reduced by all or a portion of old-age insurance benefits under the Social Security Act, payments under a self-insurance plan, a wage continuation plan, or a disability insurance policy provided by the same employer, or pension or retirement payments under a plan or program of the employer, made for the same time period as the weekly benefits.
• An employee’s perception of actual events must be “grounded in reality” in order to support a compensable claim for mental disability.  Under prior law, mental disabilities were compensable if they arose out of actual events of employment, “not unfounded perceptions thereof.”
• The bill limits wage-earning capacity only if an employee is unable to perform all jobs paying the maximum wages in work suitable to his or her qualifications and training.
• The new law allows an employee to be treated by his or her own physician after 28 days, rather than 10 days, from the start of medical care.
• The bill also provides that a professional athlete hired under a contract with an employer outside of this State will be exempt from the Act if (a) the athlete sustained a personal injury arising out of the course of employment while he or she was temporarily in this State; (b) the employer had obtained worker’s compensation insurance coverage under the law of another state that covered the injury in Michigan, and (c) the other state recognized the extraterritorial provisions of the Act and provided a reciprocal exemption for professional athletes whose injuries arose out of employment while temporarily in that state and were covered by the worker’s compensation law of Michigan.  It bears mention that on June 17, 2011, Florida Governor Rick Scott signed a similar “reciprocity” statute [House Bill 723].
• The Michigan legislation requires interest to be calculated in the same manner as provided for a money judgment in a civil action under the Revised Judicature Act.  Currently, interest on compensation must be paid at the rate of 10% per annum from the date each payment was due.
• The bill also provides that if an employee is terminated from reasonable employment for his or her fault, the employee will be considered to have voluntarily removed himself or herself from the work force and would not be entitled to wage loss benefits.