Key Takeaways
- Michigan workers' compensation is MANDATORY for most employers with employees
- Coverage can be obtained through private insurers, self-insurance, or group self-insurance
- Benefits include medical care, wage loss (80% of after-tax wages), and specific loss benefits
- The Workers' Disability Compensation Agency (WDCA) administers the system
- Michigan has a 7-day waiting period before wage loss benefits begin
Last updated: January 2026
Michigan Workers' Compensation Insurance
Michigan has a mandatory workers' compensation system covering most employees.
Mandatory Coverage
Michigan workers' compensation is mandatory for most employers:
Who Must Have Coverage
| Employer Type | Coverage Required |
|---|---|
| Private employers (3+ employees) | REQUIRED |
| Private employers (1-2 employees working 35+ hrs/wk for 13+ weeks) | REQUIRED |
| All public employers | REQUIRED |
| Agricultural employers (3+ employees 35+ hrs/wk) | REQUIRED |
Exemptions
Some employers are exempt:
- Sole proprietors without employees
- Partnerships (partners may opt out)
- LLC members (may opt out)
- Domestic servants (under certain conditions)
Exam Tip: Unlike Texas (the only state where WC is voluntary for private employers), Michigan REQUIRES workers' compensation for most employers.
Obtaining Coverage
Michigan employers have options for coverage:
Coverage Options
| Option | Description |
|---|---|
| Private Insurance | Purchase from admitted insurer |
| Self-Insurance | WDCA approval required; large employers |
| Group Self-Insurance | Small employers can pool together |
Assigned Risk Pool
- For employers unable to obtain voluntary coverage
- Michigan Workers' Compensation Placement Facility
- Coverage at higher rates
- Last resort option
Workers' Disability Compensation Agency (WDCA)
The WDCA (under LARA) administers Michigan workers' compensation:
WDCA Functions
| Function | Description |
|---|---|
| Oversight | Administers WC system |
| Disputes | Resolves claim disputes |
| Self-Insurance | Approves self-insurance |
| Compliance | Monitors employer compliance |
| Benefits | Oversees benefit payments |
Benefits for Employees
Michigan workers' comp provides these benefits:
Benefit Types
| Benefit | Description |
|---|---|
| Medical Care | All reasonable medical treatment |
| Wage Loss | 80% of after-tax average weekly wage |
| Specific Loss | Scheduled benefits for loss of body part |
| Vocational Rehab | Help returning to work |
| Death Benefits | To dependents |
Wage Loss Benefits
- Rate: 80% of after-tax average weekly wage
- Maximum: State maximum applies (adjusted annually)
- Waiting Period: 7 days before wage loss begins
- Retroactive: If disability exceeds 2 weeks, waiting period paid
Specific Loss Benefits
Scheduled benefits for permanent loss:
- Loss of arm, hand, leg, foot
- Loss of vision, hearing
- Disfigurement
- Based on weeks of compensation
Rate Regulation
Michigan workers' compensation rates:
Rate System
- DIFS oversight of rates
- Experience modification rating
- Classification codes by industry
- Loss-sensitive rating available
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Test Your Knowledge
Is workers' compensation insurance mandatory for private employers in Michigan?
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Test Your Knowledge
What percentage of after-tax wages do Michigan workers receive for wage loss benefits?
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