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Employer’s guide to Michigan workers’ comp insurance

Ready to figure out how to secure workers’ compensation insurance for your Michigan business? Huckleberry is here to help.

The following guide will help you learn all you need to know about the Michigan Department of Labor and Economic Opportunity, the Michigan Workers’ Disability Compensation Act, Michigan workers’ compensation laws, and how to get workers’ compensation insurance.

Step 1: Is workers’ comp insurance required in Michigan?


Michigan workers’ compensation laws dictate that employers must carry workers’ compensation insurance if they have 3 or more employees or if one employee is working more than 35 hours per week for 13 weeks or more.

Michigan workers’ compensation laws apply to both public and private employers.

Do I need workers’ comp for Michigan subcontractors?

If you're hiring a subcontractor for your business, the subcontractor is not mandated to secure workers’ compensation insurance under Michigan workers’ compensation laws.

To determine if someone providing you work services fits the “subcontractor” designation, you should contact the Division of Workers’ Compensation to speak with a workers’ compensation attorney or another workers’ comp law firm for clarification. Most of the time, subcontractors are determined based on whether the employer has control over the worker and how the employer controls the work.

Do I need workers' comp for independent contractors in Michigan?

Under Michigan workers’ compensation laws, all independent contractors do not need to be covered under workers’ compensation insurance. For a worker to be treated as an independent contractor, the employer has to prove that the worker conducts work without their control or direction, the worker performs work outside the usual course of the employer’s business, and that the work is being done by someone who has their independent trade or business for the specific type of work being done.

I’m an out-of-state employer. Do I need workers’ comp in Michigan?

Under Michigan workers’ compensation laws, out-of-state employers must secure workers’ compensation insurance for any work performed in Michigan.

Suppose you’re an out-of-state employer and already have workers’ compensation insurance in your state. In that case, you can obtain Michigan workers’ compensation coverage by adding a Michigan endorsement—Item 3A—to your existing policy.

Listing Michigan under item 3C of your existing policy is not sufficient. Per Michigan workers’ comp laws, you must add the Michigan endorsement to Item 3A.

However, if your out-of-state workers’ compensation coverage is with a company not licensed in Michigan, you cannot add the Item 3A endorsement to your policy. Under Michigan workers’ compensation laws, the only way to properly insure your Michigan employees is through the purchase of a Michigan workers’ compensation policy via a licensed Michigan insurance carrier.

Step 2: What happens if I don’t get workers’ comp in Michigan?

If you fail to secure workers’ compensation insurance when Michigan workers’ compensation laws require, the Michigan Workers’ Compensation Agency (WCA) may petition the court to prohibit your business from hiring anyone else until you’ve secured the right workers’ compensation coverage.

You could also be fined $1,000 or be imprisoned for 30 days to 6 months, with each day your company is uninsured being a separate offense.

It doesn’t seem like a good gamble, so while you’re thinking about it, get workers’ comp insurance.

Step 3: I’m a business owner in Michigan. Do I need to purchase workers’ comp for myself?

You’re all set to purchase workers’ comp, but you need help figuring out whether you’re allowed to exclude any of your officers or upper leadership from coverage.

We’re here for you. Here’s how the exemption works in the State of Michigan:

First, your employees are covered.

All full-time and part-time employees will be covered when you purchase workers’ comp for your business.

Is your business a corporation?

If so, your corporate officers are automatically included in your workers’ comp policy.

Is your business a sole proprietorship?

Sole proprietors are exempt from the workers’ comp requirement. Outside of that, Michigan workers’ compensation laws offer employers a Notice of Exclusion Form—WC-337—to exempt themselves from workers’ compensation insurance in certain situations. Eligibility for exemption must be where employers can exclude all employees and no subcontractors are being used to run the business:

  • If you’re employing all family members
  • If all employees are partners
  • If all employees are corporate officers who own 10% or more of the company
  • If you’re an LLC and all of your employees are members/managers who own 10% of the business

Want workers’ comp anyway? Contact your insurance company. (Note that not every insurance company offers coverage for sole proprietors.)

Step 4: How do I get workers' comp in Michigan?

There are 2 main ways to get workers’ comp insurance in Michigan:

  1. The traditional way: Find an insurance agent or insurance broker and fill out many paper forms, provide payroll information and other supporting documents—then wait for a quote. This process can take up to a few weeks, so don’t procrastinate.
  2. The digital way: Get a quote in about 5 minutes. Everything is online. Everything is easy.

Step 5: What is the cost of workers’ comp in Michigan?

It depends on what kind of business you run and the size of your payroll. The bigger your payroll, the more you’ll spend on workers’ comp. Your rate will also change based on your industry. A tech company, for example, will pay a lot less for workers’ comp than a construction company would—even if their payrolls are identical.

In terms of specific workers’ comp costs, the average monthly cost in Michigan is $104 in premium. Huckleberry customers have gotten coverage for as little as $19 per month—not even a dollar per day.

You can find a temporary total of how much you would pay by getting an instant workers’ comp estimate.

Step 6: What are the workers’ compensation insurance limits in Michigan?

When you request a workers’ comp estimate, your rate will automatically be calculated based on payroll and other factors—and there’s nothing you need to think about or decide.

The amount your insurance company might pay is theoretically unlimited. Suppose a worker becomes permanently disabled because of a work-related injury. In that case, an insurance company might pay disability benefits to that worker for the rest of that worker’s lifetime.

Step 7: So, what specific losses does workers’ comp cover in Michigan?

Workers’ compensation medical benefits cover medical treatment and costs for work-related illnesses for injured workers.

Suppose your employee has some medical issue or occupational disease directly from employment. In that case, workers’ comp benefits will step in to ensure they have the funds they need to recover and join the workforce again. It will also pay out wage loss benefits, permanent disability benefits—80% of your average weekly wage in Michigan—and death benefits, should the worst happen.

Now let’s look at the details of Michigan workers’ comp insurance.

Medical expenses

Under Michigan workers’ compensation laws, if one of your employees gets injured on the job, workers’ comp takes care of medical bills and other associated costs that fall under a workers’ compensation claim.

For example, workers’ comp may cover expenses for a back injury from a sudden accident or the cost of treating carpal tunnel syndrome if your employee has been injured because of a repetitive motion at work. Pre-existing conditions aggravated by workplace duties—assuming the primary cause of the disability is the work injury—could also be covered, as could diseases and infections resulting from the initial injury. Even travel costs to and from appointments, physical therapy, vocational rehabilitation, and other rehabilitation benefits and days of treatment would likely fall under workers’ comp coverage.

Workers’ comp will cover most expenses associated with a work-related illness or personal injury.

On the other hand, Michigan workers’ comp would probably not cover medical expenses for an injury that results from ignoring safety regulations and workplace rules, nor would it cover an employee if they were injured because of being intoxicated or under the influence of illegal substances on the job. Also, Michigan workers’ compensation laws clarify that workers’ comp medical benefits do not cover “pain and suffering” or stress-related conditions, making heart attacks a bit of a gray area. (But, hey, it’s good practice not to stress your employees out.)

Lost wages

If a workplace injury is severe enough to cause an employee to miss work, workers’ comp can help bridge the financial gap.

Death benefits

Should the worst happen, workers’ compensation benefits can help pay for funeral expenses and other costs associated with the death. It will also pay out dependency benefits to the employee’s family.

Step 8: What should I do if my Michigan employee is injured and needs workers’ comp?

Unfortunately, accidents can happen even in the safest of workplaces. But we’re here to help.

Here’s what to do immediately after a workplace accident

Make sure your employee gets medical attention.

This is your priority. Call 911 immediately for severe and life-threatening injuries, and arrange transportation to the nearest Urgent Care for less-severe injuries. Seriously, take care of your people before you do anything else.

Let your insurance company know.

Call your insurance agent and open a workers’ compensation case. The insurance rep may fill out a form for you and send you copies within 3 business days. But, if they don’t, you’ll need to fill out the form yourself.

Document the job injury.

Fill out the insurance coverage form, then give your insurance carrier and employee a copy ASAP. Insurance companies prefer that the injured employee sign the form, but you can write “not available” in their signature box if they can't. (If you’re a Huckleberry customer, you can also find this form online in your customer portal).

Covered the big stuff? Let’s look at some other things you need to know.

Who is responsible for relaying information between the insurance carrier and employee?

That would be you—the employer. It’s essential to promptly relay information from the insurance carrier to the employee (and vice versa). In Michigan, you have 90 days to report getting sick or injured and 2 years to file a claim. The closer to the date of injury you report the issue, the faster the benefits can kick in.

Once the initial form is turned in, the insurance company will decide whether the workers’ comp claim is eligible for benefits. If they decide it is, they will choose a medical practitioner to take on the employee’s diagnosis and medical care and give the option for one change of medical practitioner.

You, the employer, must get a list of the employee’s work limitations (if applicable) from the doctor’s office and report them to the insurance company.

Then, if the doctor determines that your employee can return to work at a limited capacity, you’ll need to inform the insurance company of what sort of restrictions you’re accommodating and whether the employee is earning the same wages they were before.

We can’t emphasize this enough: Keep in touch with your insurance adjuster regularly while making these decisions and observations.

What happens if a Michigan employee dies on the job?

Worst-case scenario—someone dies on the job. Here’s what to do.

First, contact the Bureau of Workers’ Disability Compensation to tell them of the incident and the death. We recommend doing it as soon as possible.

Next, fill out an injury or illness form—the Employer’s Basic Report of Injury, Form 100—and send it to your insurance carrier.

Finally, give your insurance company a follow-up call. They’ll be able to tell you the appropriate next steps.

Any additional information I should be passing along?

Yes. You should have already posted workcomp information—a notice to employees poster— in a conspicuous place, a requirement under Michigan workers’ compensation laws. This information includes your insurance company’s name and phone numbers, an anti-fraud statement, and the expiration date of your policy.

Congratulations! You did it! You’ve just learned how to secure workers’ compensation insurance per Michigan workers’ compensation laws!

Have more questions? Your insurance company has done all of this before.

Know that your insurance company is there to walk you through the intricacies of state laws surrounding the workers’ compensation system. If you have any questions, give them a call. They’ll make sure you’re getting the guidance you need.

Just remember, for all things business insurance, Huckleberry has you covered. In less time than it takes to plan a day trip around Michigan, Huckleberry can provide you with online insurance quotes and policy options that will protect your small business now and in the future.

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