A new bill introduced in the Michigan Senate aims to redefine disability and implement other changes to the state’s workers’ compensation system.
AM Best reports that Senate Bill 1079, introduced by Democratic Senator John Cherry (pictured above), has drawn criticism from the Michigan Chamber of Commerce, which claims the proposed changes could significantly impact workers’ compensation losses and premiums.
Under the bill, an employee would be considered disabled if they are unable to perform or "obtain one or more jobs in work that the employee performed before or at the time of the personal injury and that is suitable to the employee's qualifications and training."
The Chamber of Commerce argues that this change would mean any instance where an employee's restrictions cannot be accommodated by an employer could result in a lifetime permanent and total disability claim.
The legislation also proposes applying the new definition of disability retroactively to all workers injured on or after June 30, 1985. The Chamber of Commerce expressed concerns, stating that this retroactive application could disrupt nearly 40 years of claims, resulting in what it called an "immeasurable and wholly inappropriate" burden on the system.
The bill would end provisions that currently reduce benefits for partially disabled workers and proposes a 10% increase in benefit levels. The Chamber of Commerce has argued that this approach would contradict the tradition of awarding higher benefits to more severely disabled workers.
Additionally, the legislation expands compensable claims to include neurocognitive disorders or "traumatic or stress-related disorders." The Chamber criticized this expansion, stating that such diagnoses are broad and lack objective criteria, potentially opening the door to disputes about causation.
This development comes as Michigan continues to evaluate changes to its insurance landscape. A study from the Insurance Research Council recently highlighted the effectiveness of the 2019 reforms to the state’s auto insurance regulations, noting improved affordability of coverage.
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