9.2 Michigan Workers' Compensation Benefits, Second Injury Fund & Self-Insurance

Michigan Workers' Compensation Benefits, Second Injury Fund & Self-Insurance

Exam Priority: Memorize every statutory number in this section: the 28-day physician choice rule, the 56-hour weekly family attendant care cap, the 7-day waiting period and 14-day retroactive payment trigger, 80% of after-tax AWW (highest 39 of 52 weeks) capped at 90% of SAWW, the 800-week conclusive presumption for Total and Permanent Disability, the 5% per year reduction from age 65 to 75, the $6,000 burial cap, 500 weeks of death benefits, and the 80% dual-employment threshold for the Second Injury Fund.

Medical Benefits & The 28-Day Physician Rule (MCL 418.315)

1. Unlimited Medical Coverage from Day 1 (MCL 418.315(1))

The employer (or its insurer) must furnish to an injured employee all reasonable medical, surgical, and hospital services and medicines, dental service, crutches, artificial limbs, eyes, teeth, eyeglasses, hearing apparatus, and other appliances necessary to cure, so far as reasonably possible, and relieve from the effects of the injury.

• No Waiting Period: Medical benefits begin immediately on Day 1 of the injury.
• No Dollar Cap or Time Limit: Benefits continue for as long as the work injury requires medical care.
• Zero Employee Cost-Sharing: There are no deductibles, copayments, or coinsurance charged to the injured worker. Providers are paid pursuant to the WDCA Health Care Services Rules / Fee Schedule and cannot "balance bill" the employee (MCL 418.315(2)).

2. The 28-Day Employer Physician Rule (MCL 418.315(1))

Who chooses the treating doctor is one of the most heavily tested questions on the Michigan Series 16-72 exam:

• First 28 Days (Employer's Choice): During the first 28 days after the inception of medical care, the employer (or insurer) has the right to choose the treating physician.
• After 28 Days (Employee's Choice with Notice): After 28 days from the inception of medical care, the employee may treat with a physician of his or her own choice by giving to the employer the name of the physician and his or her intention to treat with that physician. If the employer or carrier objects, it may file a petition stating its reasons; after notice and a prompt hearing, a workers' compensation magistrate may order the employee to stop treating with that physician or to pay for treatment received from that physician.

3. 56-Hour Weekly Cap on Family Attendant Care (MCL 418.315(1))

Attendant or nursing care shall not be paid for more than 56 hours per week if that attendant or nursing care is provided to the injured employee by any combination of the employee's spouse, brother, sister, child, or parent.

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Wage-Loss (Indemnity) Benefits (MCL 418.301, .311, .351–.371)

1. The 7-Day Waiting Period & 14-Day Retroactive Trigger (MCL 418.311)

• Days 1–7 (No Indemnity): No weekly wage-loss compensation is paid for an injury that does not incapacitate the employee from earning full wages for a period of at least 1 week (7 consecutive days).
• Days 8–13 (Payable from Day 8): If incapacity extends beyond 7 days (e.g., 8 to 13 days), compensation begins on the 8th day after the injury.
• 14 Days or More / Death (Retroactive to Day 1): If incapacity continues for 2 weeks (14 consecutive days) or longer, or if death results from the injury, compensation is computed and paid retroactively from the date of the injury (meaning the initial 7-day waiting period is paid in full).

2. Weekly Benefit Formula & Maximum Cap (MCL 418.351, .355, .371)

• Average Weekly Wage (AWW) Calculation (MCL 418.371(2)): The employee's pre-injury AWW is calculated by averaging the highest 39 paid weeks during the 52 weeks immediately preceding the injury (if employed fewer than 39 weeks, by averaging all weeks actually worked).
• 80% After-Tax Benefit Rate (MCL 418.351(1)): Weekly wage-loss compensation equals 80% of the employee's after-tax average weekly wage (using tables published annually by the WDCA based on tax filing status and dependents).
• 90% SAWW Maximum Cap (MCL 418.355): The weekly benefit cannot exceed 90% of the Michigan State Average Weekly Wage (SAWW) as of the prior June 30 ($1,164/week for 2025 injuries; $1,201/week for 2026 injuries). Workers' compensation benefits are exempt from federal and state income taxes.

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Categories of Disability & Statutory Benefit Schedules

The 7 Statutory Total and Permanent Disability Losses (MCL 418.361(3))

Total and permanent disability is conclusively presumed for 800 weeks only for the following seven catastrophic conditions:

1. Total and permanent loss of sight of both eyes;
2. Loss of both legs or both feet at or above the ankle;
3. Loss of both arms or both hands at or above the wrist;
4. Loss of any two of the members or faculties enumerated in (1), (2), or (3);
5. Permanent and complete paralysis of both legs, both arms, or 1 leg and 1 arm;
6. Incurable insanity or imbecility;
7. Permanent and total loss of industrial use of both legs, both hands, both arms, or 1 leg and 1 arm.

Special Adjustments: Illegally Employed Minors & Age 65 Reduction

• Illegally Employed Minors — Double Compensation (MCL 418.161(1)(l)): If a minor under 18 years of age is injured while illegally employed (e.g., working without a required work permit or in a prohibited hazardous job), the minor receives double (2x) weekly compensation, unless the minor fraudulently used permits or certificates of age.
• Age 65 Benefit Reduction (MCL 418.357): When an employee receiving weekly benefits reaches or has passed age 65, weekly benefits are reduced by 5% for each year following the 65th birthday until the benefit is reduced by 50% at age 75 (it is never reduced below 50% of the benefit in effect at age 65, and this reduction does not apply to someone inapplicable to Social Security old-age benefits).

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Vocational Rehabilitation (MCL 418.319) & Death Benefits (MCL 418.321, .345)

• Vocational Rehabilitation (MCL 418.319): When an injury prevents an employee from performing work for which they have previous training or experience, the employee is entitled to vocational rehabilitation services, retraining, and job placement for up to 52 weeks (extendable by special order of the Director for up to an additional 52 weeks, for a 104-week maximum). An unjustifiable refusal to accept rehabilitation results in a loss or reduction of weekly compensation during the refusal.
• Burial Allowance (MCL 418.345): If death results from the work injury, the employer/insurer pays the reasonable expense of the employee's last sickness and burial, not to exceed $6,000.
• Weekly Death Benefits (MCL 418.321, .356(2)): Wholly dependent survivors receive 80% of the deceased employee's after-tax AWW for 500 weeks from the date of death, subject to a maximum of 90% of the SAWW and a minimum of 50% of the SAWW. If any wholly or partially dependent person is under age 21 when the 500-week period ends, a workers' compensation magistrate may order the employer to continue some or all of the weekly payments until that person reaches 21.

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Michigan Statutory Funds, Self-Insurance (MCL 418.501–.611, .372) & Claims Administration

1. The Second Injury Fund (SIF — MCL 418.521, .372, .921)

Financed by annual assessments on all Michigan workers' compensation insurers and self-insured employers, the Second Injury Fund performs three critical functions:

1. Second Permanent Loss Resulting in Total & Permanent Disability (MCL 418.521(1)): If an employee has a permanent disability in the form of the loss of a hand, arm, foot, leg, or eye and subsequently suffers a work injury resulting in another such loss (creating Total and Permanent Disability), the employer pays only the specific-loss weeks for the second injury alone, and the SIF pays the remainder of the Total and Permanent Disability benefits (plus differential benefits increasing older awards to current statutory minimums).
2. Dual Employment Apportionment (MCL 418.372): When an employee holds more than one job at the time of injury, weekly benefits are calculated using the employee's combined earnings from all employments. If the employment that caused the injury provided more than 80% of the employee's total AWW, that employer/insurer pays 100% of the benefit. If the injury-causing employment provided 80% or less of total AWW, the Second Injury Fund reimburses the insurer for the percentage of weekly benefits attributable to the other employment(s).
3. Vocationally Handicapped Persons (MCL 418.901–.941): When an employer hires a worker certified by Michigan Rehabilitation Services as vocationally handicapped (due to epilepsy, diabetes, cardiac disease, or back injury), the employer's liability for weekly and medical benefits is capped at 52 weeks after the injury; the SIF reimburses 100% of benefits paid after 52 weeks.

2. Other Michigan Funds, Self-Insurance (MCL 418.611) & WDCA Claim Reporting

• Silicosis, Dust Disease, and Logging Industry Compensation Fund (MCL 418.531): Reimburses insurers/employers for weekly benefits paid in excess of statutory thresholds ($25,000 or 104 weeks, whichever is greater) for silicosis/dust diseases, logging industry injuries, and PBB exposure.
• Self-Insured Security Fund (SISF — MCL 418.537) & Self-Insurance (MCL 418.611): Under MCL 418.611, the WDCA Director may authorize an individual employer (upon proof of financial solvency and a surety bond, letter of credit, or excess insurance) or two or more employers in the same industry (group self-insurance) to self-insure. If a private self-insured employer becomes insolvent, the SISF pays statutory benefits to injured workers.
• WDCA Reporting & Redemptions (MCL 418.801, .835): Employers must file Form WC-100 (Employer's Basic Report of Injury) with the WDCA for any injury resulting in death, specific loss, or disability exceeding 7 consecutive days. Weekly compensation becomes due and payable on the 14th day after the employer has notice or knowledge of the disability (MCL 418.801(1)), reported via Form WC-701 (Notice of Compensation Payments) or disputed via Form WC-107 (Notice of Dispute). After 6 months from the date of injury, the parties may settle all future liability for a lump-sum redemption agreement, which is valid only if approved at a hearing before a Workers' Compensation Magistrate (MCL 418.835).