DEPARTMENT OF LABOR AND ECONOMIC OPPORTUNITY
WORKERS' DISABILITY COMPENSATION AGENCY
GENERAL RULES
Filed with the secretary of state on
These rules take effect immediately upon filing with the secretary of state unless adopted under section 33, 44, or 45a(9) of the administrative procedures act of 1969, 1969 PA 306, MCL 24.233, 24.244, or 24.245a. Rules adopted under these sections become effective 7 days after filing with the secretary of state.
(By authority conferred on the director of the workers' disability compensation agency by section 205 of the worker’s disability compensation act of 1969, 1969 PA 317, MCL 418.205, and Executive Reorganization Order Nos. 1996-2, 1999-3, 2002-1, 2003-1, and 2019-3, MCL 445.2001, 418.3, 445.2004, 445.2011, and 125.1998)
PART 1. RECORDS DEFINITIONS
R 408.31
Report of injury; claim for compensation, additional reports; weekly rate of
compensation. Definitions.
Rule
1. (1) An employer shall report immediately, to the bureau, on form 100, all
injuries, including diseases, which arise out of and in the course of the
employment, or on which a claim is made, and result in any of the
following:
(a)
Disability extending beyond 7 consecutive days, not including the date of
injury.
(b)
Death.
(c)
Specific losses.
(2)
Any report of injury filed with the bureau by an employer that fails to meet
the requirements of subrule (1) of this rule shall not be maintained as a
record of the bureau unless filed with a form 107.
(3)
An employer shall give a copy of the report of injury (form 100) to the injured
employee immediately and in the case of death, to the dependent. Form 100 shall
indicate compliance with this requirement. A delay in reporting shall not
occur because of this requirement. In case of death, an employer shall also
immediately file an additional report on form 106.
(4)
An employee shall make a claim for compensation to the bureau on form 117.
The
bureau shall mail a copy of form 117 to the employer.
(5)
After an employee has given an employer the name of the physician with whom he
or she intends to seek treatment and has commenced treatment with the physician
under section 315 of the act, the employee shall obtain and promptly
furnish a report to the employer, insurance company, or
self-insurers’ security fund. The report shall set forth the history
obtained, the diagnosis, the prognosis, and other information reasonably
necessary to properly evaluate the injury, the disability, and the necessity
for further rehabilitation or treatment. Thereafter, at reasonable intervals
of not more than 60 days, an employee shall obtain and furnish a current
medical report, paid for by the carrier, containing the same information,
together with an itemized statement of charges for services rendered to date.
A
self-insured employer, insurance company, or self-insurers’ security fund is
not required to make payment to the physician until the reports and
itemized charges have been furnished to it.
Medical
fees shall not exceed fees considered usual and reasonable for the services
performed in accordance with the health care service rules.
(6)
For a case that requires the payment of compensation, a carrier, the second
injury fund, the self-insurers’ security fund, and the silicosis, dust disease
and logging industry compensation fund, shall file all of the following
reports, notices, or statements as required by the bureau:
(a)
Form 701 on the day after the first payment of compensation. The carrier
or fund shall furnish a copy of form 701 to the employee.
(b)
Form 701 on the day after the stopping of payment of compensation showing
the amount of compensation paid in every case. Subject to R 408.40, when
compensation is stopped on the basis that the employee has recovered from
disability or that the employee is able to return to work, but has not done
so, the medical report supporting this position shall be attached to form
701, or filed within 30 days thereafter. When a supplemental form 701 is filed,
only that amount not previously reported shall be shown. In a case that
requires the filing of form 701, the carrier and the funds shall, in
writing, advise the injured employee whose benefits have stopped of the
reasons for the action taken at the same time by furnishing a copy of the
form 701 to the employee.
(c)
The director may require a report showing the amount of compensation
actually paid in cases where payment of compensation has not been previously
stopped as of December 31 by the filing of form 701, for that calendar year,
regardless of the length of time the case was open. If during the calendar
year a form 701 had been previously filed, then only the payments made during
the calendar year after the filing of form 701 shall be reported. The report
shall be furnished to the bureau at a time and in a manner as the director
may reasonably require.
(d)
Immediate notification to the bureau of any change in the rate of
compensation. The notice shall state the reason on form 701.The carrier or
fund shall send a copy to the employee.
(e) A
statement of the attending physician in every specific loss. The statement
shall identify the date and extent of the loss.
Rule 1. (1) As used in these rules:
(a) “Act” means worker’s disability compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941.
(b) “Appearance” means participation in person, by telephone, video conference, or other electronic means, at any hearing or conference under this act.
(c) “Approved vocational rehabilitation provider” means any person, firm, partnership, corporation, or other legal entity that has submitted form WC-502, or its electronic equivalent, meets the minimum standards as prescribed by the agency for approval, and has been approved by the agency.
(d) “Debit card” means a stored value card issued by a federally insured financial institution that provides a claimant or the dependent of a claimant immediate access for withdrawal or transfer of the claimant’s weekly compensation payments through a network of automatic teller machines. “Debit card” includes a card commonly known as a payroll debit card, payroll card, or paycard.
(e) “Electronic equivalent” means a record created, generated, sent, communicated, or received by electronic means.
(f) “Electronic filing” means the process of submitting a document over the internet to the agency, including State of Michigan File Transfer System (FTS), in accordance with the instructions available on the agency’s website.
(g) “Electronic service” means the serving of any document by e-mail or electronic file transfer.
(h) “Electronic signature” means an electronic sound, symbol, or process, attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.
(i) An electronic signature may be a graphic representation of the signature.
(ii) The following forms are acceptable: “/s/ John Smith,” “/s/ John Smith, Attorney,” or “/s/ John Smith, Authorized Representative.”
(i) “File Transfer Service” (FTS) means an electronic computer-based system that facilitates the transmission of a computer file through a communication channel provided by the State of Michigan from one computer system to another.
(j) “Forensic vocational evaluation” means an independent, individualized assessment and evaluation process involving the application of specialized knowledge and the use of scientific, technical, or other professional knowledge for the resolution or clarification of issues related to a claim, typically in a legal setting. This is not vocational evaluation as used in R 408.45a or section 319 of the act, MCL 418.319.
(k) “IWRP” means an individualized written rehabilitation plan. An IWRP is a document mutually developed by the vocational counselor and the employee that provides a detailed outline of goals, objectives, responsibilities, and services necessary for successful rehabilitation of the employee.
(l) “Return-to-work hierarchy” means a sequence of steps designed to assist an employee with returning to any of the following:
(i) The same job.
(ii) The same employer.
(iii) A modified job with the same employer.
(iv) A different job with the same employer.
(v) The same job with a different employer.
(vi) A different job with a different employer.
(vii) Self-employment.
Remedial and retraining services can be applied at any level of the hierarchy to facilitate success.
(m) “Vocational evaluation” means the first step in the vocational rehabilitation process. It is a comprehensive process of gathering and analyzing relevant information such as educational, medical, and vocational history, interests, aptitudes, and vocational assessment results in order to develop recommendations and the IWRP. The vocational evaluation should include a face-to-face interview with the employee.
(n) “Week” as used in section 319 of the act, MCL 418.319, means a seven-day period during which the employee actually participates in vocational rehabilitation services that are part of an approved IWRP.
(2) Unless the context of the rule indicates otherwise, the terms “agency” and “director” have equivalent meaning.
(3) Terms defined in the act have the same meanings when used in these rules.
PART 2. HEARINGSRECORDS
R 408.31a Computation of weeks and days. Report of injury; claim for compensation, additional
reports; weekly rate of compensation.
Rule 1a.
In computing periods of disability and of compensation, a week shall be
computed as 7 days and a day as 1/7 of a week, without regard to Sundays,
holidays, and working days. (1) An employer shall report immediately, to
the agency, on form WC-100, or its electronic equivalent, all injuries,
including diseases, which arise out of and in the course of the employment, or
on which a claim is made, and result in any of the following:
(a) Disability extending beyond 7 consecutive days, not including the date of injury.
(b) Death.
(c) Specific losses.
(2) Any report of injury filed with the agency by an employer that fails to meet the requirements of subrule (1) of this rule may not be maintained as a record of the agency unless filed with a form WC-107, or its electronic equivalent.
(3) An employer shall give a copy of the report of injury form WC-100, or its electronic equivalent, to the injured employee immediately or, in the case of death, to the dependent or dependents. The employer or its carrier shall include a written notice to the injured employee or dependent or dependents on a form prescribed by the director of the agency, advising of their rights under the act. Any filing required in this section indicates compliance with this requirement. A delay in reporting may not occur because of this requirement. In case of death, an employer shall also immediately file an additional report on form WC-106, or its electronic equivalent.
(4) An employee shall make a claim for compensation to the agency on form WC-117, or its electronic equivalent. The agency shall provide a copy of form WC-117, or its electronic equivalent, to the employer and carrier. The carrier shall respond to a form WC-117 in the same manner as a form WC-100.
(5) No later than 28 days following an injury, the employer or carrier shall deliver to the employee a form or its electronic equivalent, as prescribed by the director of the agency, describing the employer or carrier’s obligation to furnish reasonable and necessary medical care for the work-related injury or disease. After an employee has given an employer the name of the physician with whom he or she intends to seek treatment and has commenced treatment with the physician under section 315 of the act, MCL 418.315, the employee shall obtain and promptly furnish a report to the employer, insurance company, private employer group self-insurers’ security fund (PEGSISF), first responder presumed coverage fund, or self-insurers’ security fund. The report must set forth the history obtained, the diagnosis, the prognosis, and other information reasonably necessary to properly evaluate the injury, the disability, and the necessity for further rehabilitation or treatment. Thereafter, at reasonable intervals of not more than 60 days, an employee shall obtain and furnish a current medical report, paid for by the carrier, containing the same information, together with an itemized statement of charges for services rendered to date.
(a) A self-insured employer, insurance company, PEGSISF, first responder presumed coverage fund, or self-insurers’ security fund is not required to make payment to the physician until the reports and itemized charges have been furnished to it.
(b) Medical fees may not exceed the maximum allowable payment (MAP) established by the fees considered usual and reasonable for the services performed in accordance with the health care service rules or the provider’s usual and customary charge, whichever is less.
(6) For a case that requires the payment of benefits, a carrier; the second injury fund; the PEGSISF; the first responder presumed coverage fund; the self-insurers’ security fund; and the silicosis, dust disease and logging industry compensation fund, shall file all of the following reports, notices, or statements in the format required by the agency:
(a) Form WC-701, or its electronic equivalent, on the day after the first payment of compensation. The carrier or fund shall furnish a copy of form 701 to the employee.
(b) Form WC-701, or its electronic equivalent, on the day after the stopping of payment of compensation, showing the amount of compensation paid in every case.
(c) Form WC-701, or its electronic equivalent, within 30 days from the annual anniversary of the date of injury on claims where the starting of weekly compensation benefits has been reported and weekly compensation benefits have not been stopped. The annual report must include a weekly summary of wages earned when partial wage loss benefits pursuant to section 301(9)(c) of the act, MCL 418.301, are being paid or have stopped prior to the anniversary date if not already reported.
(d) Form WC-701, or its electronic equivalent, on the day after a change in the rate of compensation due to:
(i) The application of sections 301(8), 354, 357, 358, 401(6) or 827 of the act, MCL 418.301, 418.354, 418.357, 418.358, 418.401, or 418.827.
(ii) A change in the number of dependents.
(iii) Recoupment of an overpayment.
(iv) Reimbursement or adjustment resulting from involvement of a fund created under section 501 of the act, MCL 418.501.
(e) If benefits have been reduced to zero for 30 days or longer, a WC-701, or its electronic equivalent, must be filed in accordance with R 408.31(b).
(i) The form WC-701 must state the reason for any change and include the calculation applied.
(7) The carrier or fund shall send a copy of any WC-701 to the employee.
R 408.31b Computation of weeks and days.
Rule 1b. In computing periods of disability and of compensation, a week is computed as 7 days and a day as 1/7 of a week, without regard to Sundays, holidays, and working days.
R 408.32 Compensation supplement fund; "maximum benefit" defined.
Rule 2. (1)
A carrier, second injury fund, PEGSISF, or self-insurers’ security fund
shall claim reimbursement from the compensation supplement fund for payments
made in accordance with section 352 of the act, MCL 418.352. A carrier,
second injury fund, PEGSISF, or self-insurers’ security fund,
shall make a claim on bureau the form WC-114, or its
electronic equivalent, application for reimbursement.
(2) A carrier, second injury fund, PEGSISF, or self-insurers’ security fund shall make an initial application for reimbursement not later than 3 months after the end of the quarter for which the right to reimbursement first accrues. The right to reimbursement first accrues on the first day of the quarter following any quarter for which supplemental benefits are first paid or ordered to be paid.
(3) A carrier, second injury fund, PEGSISF, or self-insurers’ security fund may make subsequent application for reimbursement quarterly, but not later than 1 year after the closing date of the quarter for which reimbursement is being requested.
(4) A
carrier, second injury fund, PEGSISF, or self-insurers’ security fund
shall submit a separate form WC-114, or its electronic equivalent,
for each quarter for which reimbursement is requested. A quarter, as used in
this rule, is based on a calendar year as identified by the bureau agency
on an annual basis.
(5) Upon a proper showing of a claim for reimbursement, the compensation supplement fund shall make payment within a reasonable time after the receipt of the claim. The compensation supplement fund shall normally make reimbursement within 3 months after the receipt of form WC-114, or its electronic equivalent, unless a dispute arises.
(6) For
the purpose of these rules, "maximum benefit" means the statutory
maximum for the year of injury upon which benefits are based; 2/3 of the
employee’s average weekly wage on the date of injury; the minimum compensation
rate in effect on the date of injury; or a maximum compensation rate
established by bureau agency order. If an employee, or his or her
dependents, is receiving maximum benefits as defined in this subrule, there
will be a presumption that benefits are being paid under section 351 or 321 of
the act, MCL 418.351 or 418.321.
(7) A
compensation supplement shall may not be paid for any of the
following received by an eligible employee or dependent:
(a) Benefits received for any period of disability before January 1, 1982.
(b) Benefits received under an agreement to redeem the liability of the carrier.
(c) A lump sum payment for remarriage under section 335 of the act, MCL 418.335.
(d) Interest paid on benefits awarded by a magistrate.
(e) Partial compensation paid under section 361(1) of the act, MCL 418.361.
(8) In a
case involving a lump sum advance payment, supplemental benefits shall are
not be part of the advance payment, but shall must continue
to be paid weekly.
(9) In a
case involving the carrier’s right to subrogation in a third-party recovery,
the amount of supplemental benefits shall be is based on the
weekly compensation rate that the employee would have been receiving on January
1, 1982.
(10) If compensation supplement benefits have been paid and if the employee is later found to be entitled to total and permanent disability benefits, then the second injury fund shall reimburse the compensation supplement fund for the appropriate amount of benefits paid by the compensation supplement fund, and the second injury fund shall reimburse the carrier for the balance of benefits that would have otherwise been paid by the compensation supplement fund.
(11) If
the second injury fund is paying differential benefits directly to the injured
employee and if the amount of differential benefits increases, then the second
injury fund either shall reimburse the compensation supplement fund for any
overpayment of monies money that the compensation supplement fund
has already reimbursed the carrier or shall reimburse the carrier
directly in cases where the compensation supplement fund has not yet reimbursed
the carrier.
(12) If a case is on appeal over the issue of whether the injured employee is totally and permanently disabled and if the claimant is receiving 70% of the amount of differential benefits that would be owed if total and permanent disability is found to apply, the amount of supplement that is due may be reduced or offset by the 70% amount that is being paid.
(13) If
the compensation supplement fund has reimbursed a carrier for the supplemental
benefits paid, and if it is later found that the amount reimbursed included an
overpayment, then the compensation supplement fund shall be is entitled
to recoupment of the overpayment from the carrier. The carrier is entitled to
recoup the overpayment from the employee.
(14)
Section 357 of the act, MCL 418.357, shall may not be
applied when the amount of supplemental benefit, as provided for in section 352
of the act, MCL 418.352, is calculated for eligible employees whose date
of personal injury is before July 1, 1968.
(15)
After the supplemental benefit has been computed in accordance with section
352(1) of the act, MCL 418.352, based on the weekly compensation rate that
the employee or dependent of a deceased employee is receiving or is entitled to
receive on January 1, 1982, had the employee been receiving benefits at that
time, the supplemental benefit shall may not be reduced or
increased by changes to the weekly compensation rate that occur after January
1, 1982, except as provided in section 352 of the act, MCL 418.352, and
in this rule.
R 408.32a Medical benefits; reimbursement application.
Rule 2a.
(1) To be reimbursed for payments made in accordance with the provisions of
section 862(2) of the act, MCL 418.862, medical benefits shall must
have been required by the terms of an award and shall have been paid
in accordance with section 315 of the act and the rules promulgated under section
315 of the act, MCL 418.315. In providing benefits as required by
section 862(2) of the act, MCL 418.862, a carrier shall require that the
employee and the provider comply with the requirements of section 315 of the
act, MCL 418.315. and the rules promulgated under section 315.
(2) Reimbursement
shall apply only applies to cases for which an initial application
for mediation or hearing is filed after March 31, 1986, under section 847 of
the act, MCL 418.847. Claims shall must be made on forms
provided by and sent submitted to the bureau agency.
of workers’ disability compensation. If other insurance coverage is or
was available to cover medical benefits paid under section 862(2) of the act, MCL
418.862, then the bureau agency will not make reimbursement.
(3)
Applications for reimbursement from the bureau agency shall
must be made not less than 30 days after the benefit amount is reduced or
rescinded by a final determination. An application for reimbursement shallmust
be made not later than 1 year after a final determination is entered that reduces
or rescinds benefits.
(4)
Reimbursement from the bureau agency shall must be
consistent with benefits awarded in the magistrate’s decision. Reimbursement
will only be made for medical benefits that were provided between the bureau
agency mailing date of the magistrate’s award and the mailing date of the final
determination of the appeal or for a shorter period as specified in the award. A
copy of the magistrate’s order and all subsequent appellate decisions shall
must accompany each request for reimbursement.
(5) A
copy of the medical bills, proof of payment, and a medical report with
sufficient documentation to demonstrate that the medical services provided fall
within the provision of the magistrate’s decision shall must accompany
each request for reimbursement. Proof of payment shall must include
certification from the carrier that it has paid the medical bills or, if requested
by the bureau agency, shall must include a receipt from
the provider which that shows that payment has been made.
(6)
Reimbursement shall may not be paid if the claim was redeemed before
the final determination or if the carrier has not provided proper
documentation.
(7) The bureau
agency shall not pay interest on reimbursable amounts.
(8) If the
bureau agency determines that all or part of the request for reimbursement
is not proper, then the bureau agency shall notify the carrier in
writing. If the carrier disputes the determination, then it may file an application
for mediation or hearing.
R 408.33 Disputed claims; late payment penalty.
Rule 3. (1)
On or before the fourteenth day after the employer has notice or knowledge of
an alleged injury or death, the carrier, PEGSISF, and self-insurers’
security fund shall notify the bureau agency on form WC-107,
or its electronic equivalent, if the right of the injured or dependent
to compensation is disputed. If compensation thereafter is paid, report it
on form 701. A copy of the form WC-107, notice of dispute, shall
must be mailed or given provided to the injured employee.
(2) The following subdivisions govern the administration and enforcement of the penalty provisions under section 801 of the act, MCL 418.801:
(a)
Under section 801(1) of the act, MCL 418.801, compensation shall must
be paid promptly and directly to the person entitled to compensation.
Weekly benefits become due and payable on the fourteenth day after the employer
has notice or knowledge of the disability or death. On that date, all
compensation which that has accrued shall must be
paid. If benefits are not paid within 30 days of becoming due and payable, then
the carrier shall pay to the employee $50.00 per day for each day after 30 days
that the benefits remain unpaid, not to exceed $1,500.00. To avoid payment of penalties, an employer or carrier must
demonstrate a good faith legal basis or actual facts supporting the dispute.
(b) If a case is in litigation and the defendant agrees to pay benefits on a voluntary basis, then the magistrate shall specify the weekly compensation rate, the period of time for which accrued benefits have become due, and which medical bills shall be paid by the carrier as a result of the injury or disability. If the benefits agreed to are not paid within 30 days of the date the agreement is formalized by the magistrate, then the carrier shall pay to the employee $50.00 per day for each day after 30 days that the benefits remain unpaid, not to exceed $1,500.00.
(c)
Medical bills become due and payable on the day the carrier receives the bill.
If there is a dispute resulting in a delay in paying the medical bills, then
the carrier shall advise the employee and doctor of the reasons for the delay
in writing. If there is no dispute and the bill remains unpaid after 30
days, after the carrier has received
notice of nonpayment by certified mail, then
the carrier shall pay to the employee $50.00 for each day after 30 days that
the bill remains unpaid, not to exceed $1,500.00.
(d) The travel allowance for medical examination, treatment,
or rehabilitation is provided in R 408.45. The employee shall be notified by
the carrier, in writing, of any dispute resulting in a
delay in paying travel allowance payments. If the expenses are not paid within
30 days of the date of the carrier’s receipt of notification of non-payment
by certified mail notification, and if the expenses are not
disputed, then the carrier shall pay the employee $50.00 for each day after 30
days that the expenses remain unpaid, not to exceed $1,500.00.
(e) Under section 801(4) of the act, an employer may be liable for all or a portion of the penalty provided in section 801(2) of the act, MCL 418.801. If there is a dispute between an employer and insurance carrier as to who is liable for the payment of the penalty, the carrier shall be liable for paying the penalties, but may be entitled to reimbursement from the employer.
(f) Any
employee who may be entitled to penalty payments under section 801 of the act,
MCL 418.801, and who has not received the payments may apply by notifying
the bureau agency in writing. A copy of the request shall must
be forwarded to the carrier. In all cases, the bureau agency
of workers’ disability compensation shall respond within a
reasonable period of time and shall act, as it deems appropriate, to
resolve any disputes involving the penalty provisions of section 801 of the act,
MCL 418.801. If a dispute continues beyond a determination by the bureau
agency or if the director believes there is a
question of compliance with the act, then the dispute may be set for a hearing
under R 408.35. A party to a dispute may request a formal hearing before a
magistrate.
(g) A carrier shall pay any penalty amounts due an injured employee as a result of the penalty provisions specified in section 801 of the act, MCL 418.801, in a separate check. Penalty amounts are not a part of the basic benefits to which an employee is entitled for the purpose of loss or assessment.
(h) Benefits, allowances, or bills are presumed paid within 30 days if a check is mailed within 27 days of becoming due and payable under these rules.
PART 23. INSURANCE HEARINGS
R 408.34 Applications
Petitions for hearing; small disputes.
Rule 4.
(1) In cases of dispute coming under the jurisdiction of the bureau
agency, any party may petition apply to the bureau agency
for relief. The complaining party shall file his or her an
application petition (formWC-104a, WC-104b,
or WC-104c), or their electronic equivalent, with the bureau
agency. at its Lansing office. The bureau agency
shall then serve the adverse party with a copy of the petition application
and, at the same time, notify the parties of the time and place of the initial
hearing. The adverse party shall file his or her their answer to
the petition application with the bureau agency within
15 days after service and serve a copy of the answer on the complaining party.
(a) A form WC-104b without a corresponding WC-104a or WC-104c does not create an exception under section 230(3) of the act, MCL 418.230.
(2) In
any case where the compensable disability of an injured employee is undisputed
and involves 1 or more disputed injury dates during the course of employment
with 1 or more employers, or during the course of employment with 1 employer
who is insured by 1 or more insurance carriers, the bureau agency may
direct compensation benefits to be paid at the maximum rate, as determined in
section 351 of the act, MCL 418.351, with no dependents as provided in
the schedule of benefits on the earliest or initial date of injury alleged. The
self-insured employer or insurance carrier that has the risk on the earliest or
initial date of injury shall make the payments. Payments shall must continue
through the mailing date of the decision of the magistrate and shall be are
adjusted in accordance with the decision unless an appeal is taken. If an
appeal is taken, section 862 of the act, MCL 418.862, shall
applyapplies. The magistrate shall order reimbursement where
appropriate.
(3) In apportionment cases that are tried involving a date of injury before
January 1, 1981, the primary action is between the last employer and the
injured employee. All other joined employers may appear, cross-examine
witnesses, give evidence, and defend on the issue of liability. In setting
trial dates for such cases, only the convenience of the plaintiff and the last
employer, or their attorney, shall be considered.
(4)
After attempting to resolve the dispute without bureau agency
involvement, either party may request the director to schedule a conference
or the director, on his or her own motion, may schedule a conference to resolve
small disputes. Parties involved in such disputes shall attend the conference.
(5) Small claims matters submitted under section 841 of the act, MCL 418.841, shall be heard by a magistrate. The parties may stipulate that any decision rendered is applicable only to the issues submitted and not res judicata in any other proceeding between the parties other than for enforcement of the determinations in the decision.
R 408.35 Bureau
Agency compliance hearings.
Rule 5.
(1) If the director believes that there has not been compliance with the act,
then the director may, on his or her own motion, give notice to the parties and
schedule a hearing for the purpose of determining compliance. The notice shall
must contain a statement of the matter to be considered.
(2) If a
matter that is alleged to be grounds for a hearing in accordance with this rule
is brought to the attention of the bureau agency, then the director
or his or her authorized representative shall review the evidence of noncompliance
with the act that is presented and, after making inquiries or investigations
that he or she deems appropriate, determine if a hearing in accordance with
this rule is necessary. The parties involved shall must be notified
within 30 days of a receipt of the request as to the time and date of hearing
or the reasons for denial.
(3) The bureau
agency shall schedule a hearing within a reasonable time, subject to the
availability and schedules of hearing personnel and the parties involved. A
request for a hearing under this rule shallmust, at a minimum, contain
sufficient information to warrant investigation or inquiry into a matter. The request
for hearing shall must include, but is not limited to, all of the
following information:
(a) Facts and law involved in the alleged failure to comply, including names, dates, amounts, or other pertinent information.
(b) A description of the redress or other specific action requested with specific references to sections of the act allegedly not complied with.
(4) The director shall issue an order on the hearing in which compliance may be ordered.
(5) Any order of the director under this rule may be appealed to the board of magistrates within 15 days after the order is mailed to the parties. If the order is not appealed within 15 days after mailing, then the order of the director is final. The board of magistrates shall conduct a hearing on the appeal within 60 days of the date of appeal to the board of magistrates.
R 408.36 Service
of papers. and other pleadings; manner of service; date of service;
statement or proof of service; filings.
Rule 6. (1)
Service of all petitions applications, papers, notices, and
orders shall must be in accordance with the following:
(a)
Service of all original petitions applications
for hearing under R 408.34(1) shall must be by the bureau agency
on each named party to the case at the time service is made.
(b)
Service of any subsequent petitions applications or motions filed
on a pending contested case which that may alter the parties to a
case shall must be by the bureau agency. The bureau
agency shall serve all new parties but may serve only the attorney for each
previously named party. Parties not represented by legal counsel shall must
be served directly. The bureau agency may request the necessary
papers, notices, and postage to be provided by the moving party.
(c)
Service of any subsequent petitions applications or motions filed
on a pending contested case which that do not alter the parties
to a case may be made by the moving party upon the adverse party. The moving
party shall is only be required to serve the attorney for
each previously named party. Any party not represented by legal counsel shall
must be served directly. The original petition or motion and proof of
service shall must be filed with the bureau agency.
(d)
Notices mailed by the bureau agency after service of the original
petition application for hearing shall must be
served upon the attorney for each named party. Any party not represented by
legal counsel shall must be served directly. If the notice
requests or requires the appearance or action of a specific party, that party shall
must also be served.
(e)
Decisions or orders issued by the bureau agency shall must
be mailed to served on all parties, by mail, e-mail to the
e-mail address on file, FTS, or may be served personally on the date
of hearing. all mailed decisions shall be served from the Lansing office or
from such other bureau offices as designated by the director. Upon mailing,
e-mailing, FTS, or personal service, the original order
and copies shall must show a mailed date or acknowledgement of
personal service on their face, from which date the appropriate appeal period shall
runs. The mailed or personal service date shall be considered the filed
date for the order.
(f)
Service of all other papers, unless otherwise directed by law, may be made by
mail, email, or FTS by the moving party upon the adverse party and proof
of such mailing shall be is prima facie evidence of such service.
Proof of such service shall must be filed with the bureau
agency.
(g)
Service of all papers under this rule upon employers whose liability under the
act is not insured according to the records of the bureau agency,
or who have not been granted the privilege of self-insurance, shall must
be by certified mail with a return receipt requested. Filing of the return
receipt shall be is prima facie proof of service.
(h) Service between the parties may be completed electronically if the parties agree to service by e-mail, or electronic file transfer subject to all of the following:
(i) The agreement for service by e-mail or electronic file transfer must set forth the FTS mailbox or e-mail addresses of the parties or attorneys that agree to electronic service.
(ii) Parties and attorneys who have agreed to service by FTS under this subrule shall immediately notify all other parties if the party’s or attorney’s FTS mailbox or e-mail address changes.
(iii) Documents served electronically must be in pdf format or other agency-approved format that prevents the alteration of the document contents.
(iv) An electronic transmission sent after 5:00 p.m. Lansing, Michigan time, is deemed to be served on the next day that is not a Saturday, Sunday, or state holiday.
(v) The parties are not required to file a copy of the electronic service agreement with the agency unless a dispute arises as to service by electronic service.
(vi) The electronic sender shall maintain an archived record of sent items that may not be purged until the conclusion of the contested proceedings, including the disposition of all appeals.
(2) The agency may serve documents on the parties, the parties’ attorney, or the parties’ authorized representative by mailing a copy, by FTS to the designated mailbox, by e-mail to the e-mail address on file, or by personal service.
(3) At the discretion of the director, the agency may use alternative service methods including:
(a) Transmitting by facsimile.
(b) Utilizing a commercial delivery service.
(c) Leaving a copy of the document at the residence, principal office, or place of business of the person or agency required to be served.
(4) Documents and pleadings may be filed in a proceeding by mailing, personal delivery, facsimile, FTS, or other agency-approved electronic filing system, if provided.
(5) All document filings must be formatted using a 12-point font on 8½ x 11 inch paper, unless filed electronically using an agency-approved electronic filing system.
(6) Documents and pleadings filed by mail, e-mail, an agency approved electronic filing system, personal delivery, or facsimile and received by the agency on or before 11:59 p.m. Lansing, Michigan time are considered filed on the same business day. If received on a weekend or holiday, they are considered received on the following business day.
R 408.38 Application for advance payment of compensation.
Rule 8. An
applicant shall submit an application for advance payment of compensation on
form WC-108, or its electronic equivalent. If the carrier, second
injury fund, self-insurers’ security fund, PEGSISF, or first
responder presumed coverage fund silicosis and dust disease fund refuses
to approve the application, then the matter shall must be set for
hearing to determine whether the application should be approved. A carrier,
second injury fund, self- insurers’ security fund, PEGSISF, or first
responder presumed coverage fund silicosis and dust disease fund
shall not approve, and a magistrate shall not order, an advance payment
of compensation to a minor dependent until a legal guardian has been appointed.
R 408.39 Redemptions.
Rule 9.
(1) An agreement to redeem the liability of the carrier, second injury
fund, self-insurers’ security fund, PEGSISF, silicosis and dust disease
fund, or first responder presumed coverage fund shall must be
submitted on form WC-556, or its electronic equivalent, agreement
to redeem liability. The agreement shall must be accompanied by a
report, approved by the employee, from a licensed medical provider or
examiner. physician stating, in detail, the findings of a recent examination.
(2) A request for review of an order of a workers’ compensation magistrate entered under section 837(1) of the act, MCL 418.837, must be filed in writing with the director. Filing may be accomplished by hand delivery, mailing, facsimile, or other electronic means as prescribed by the director.
(3) A request for review must be received by the director not later than 15 days after the service date that appears on the face of the redemption order.
(4) The party filing a request for review shall provide copies to all other parties at the time of filing with the director.
(5) The party filing a request for review shall file with the director a copy of the transcript of the redemption hearing within 30 days of filing the request for review. A copy of the transcript must be provided to all parties at the time of filing with the director. The director may grant extensions of time to comply with this requirement for sufficient cause shown.
(6) If the director requests review of the order of the workers’ compensation magistrate, the director is responsible for adherence to these rules.
(7) Service of all filings made under this rule may be made upon a parties’ attorney of record. A party not represented by an attorney must be served personally or by mail.
(8) Proof of service must be filed with the director with each filing and served upon all parties or their attorney.
(9) Failure to comply with these rules may result in dismissal of the request for review.
R 408.40 Stoppage, reduction, or suspension of compensation.
Rule 10.
(1) If compensation is being paid under an order or award of the magistrate,
or workers’ disability compensation appellate appeals
commission, or an appellate court, then compensation shall may
not be discontinued or reduced without a further order or award, except as
provided in subrules (3) and (4) of this rule and sections 301(5)(b)(8),
301(9)(c), and 401(6) and 361(1) of the act, MCL 418.301
and 418.401. A petition to stop compensation shall include both of the
following:
(a) Proof of payment of
compensation to within 15 days of the date of the filing of a petition to stop
compensation.
(b) An affidavit stating that
the employee has returned to gainful employment and substantially describing
the nature of the employment, or a signed statement from a physician stating
that the employee is able to return to employment.
(2) The bureau shall schedule a
hearing within 30 days of receiving a petition to stop compensation, and an
order shall be entered under R 408.36.
(2) At the time of filing an application requesting a stoppage of compensation, the moving party shall provide to the claimant and counsel, if represented, both of the following:
(a) Proof of payment of compensation to within 15 days of the date of the filing of a petition to stop compensation.
(b) An affidavit stating that the employee has returned to gainful employment and substantially describing the nature of the employment, or a signed statement from a physician stating that the employee is able to return to unrestricted employment or that the current wage loss is no longer related to the work injury.
(3) If a letter that carries a compensation check is returned
by the United States post office unopened, and if a diligent search has been
made for the party to whom compensation payment is due under the terms of an
order or award, then the party liable for payment may suspend payment upon
filing an affidavit that the check was returned and a diligent search was made
to locate the party. The suspension shall not prejudice the reinstatement of
suspended payments. Upon receipt of an
application requesting a stoppage of compensation, the agency shall schedule a hearing with a
magistrate within 60 days.
(4) Upon filing of the report required by R 408.31(6)(d)
and notification to an employee, compensation benefits may be reduced in
accordance with the act for changes in dependency and age 65 reductions. If
a letter that carries a compensation check is returned by the United States
post office unopened, and if a diligent search has been made for the party to
whom compensation payment is due under the terms of an order or award, then the
party liable for payment may suspend payment upon filing with the agency an
affidavit that the check was returned and a diligent search was made to locate
the party. The suspension may not prejudice the reinstatement of suspended
payments.
(5) Upon filing of the report required by R 408.31a(6)(e) and notification to an employee, compensation benefits may be reduced in accordance with the act for changes in dependency, coordination of benefits, wages earned, and age 65 reductions.
(6) Except as provided under section 354 of the act, MCL 418.354, where the carrier, PEGSISF, first responder presumed coverage fund, or self-insurers’ security fund has voluntarily paid benefits or paid benefits pursuant to a voluntary pay agreement, no reimbursement of previously paid benefits may be ordered against the employee unless the employer or carrier establishes that the employee concealed post-injury earnings that, if reported, would have reduced the amount of wage loss benefits paid.
R 408.40b Appearances
at mediation conferences.
Rule
10b. (1) In a contested case, in a hearing district designated by the
director, the parties or their attorneys shall may appear personally
before the bureau agency at a any hearing or mediation
conference at a date and place scheduled by the director in person, by telephone, video conference, or other
electronic means.. Failure of the
petitioner any party or his or her attorney to appear in a timely
manner and participate in a mediation conference may result in the
application for mediation or hearing being deemed to have been voluntarily
withdrawn under section 205 of the act, MCL 418.205. Failure of the
defendant or its attorney to appear in a timely manner and participate in a
mediation conference may subject the defendant to being charged immediately
under R 408.35 for noncompliance with the act. A party that fails to appear and
participate in a scheduled mediation conference shall obtain the dates for any
future mediation conferences or hearings scheduled.
(2) The bureau
agency may require any information from the parties that may be necessary
to monitor the progress of the case, assist in the voluntary exchange of
information between parties, and facilitate the scheduling of cases.
(3) If
the parties agree to compromise the dispute by voluntary payment, the terms of
such payment shall must be specified on the voluntary payment
form signed by both parties and the mediator director or designated
representative. If the benefits agreed to are not paid within 30 days of
the date the agreement is personally served or mailed by the mediator agency,
then the carrier shall pay to the employee penalties in accordance with section
418.801 of the act, MCL 418.801.
R 408.41 Notice of insurance.
Rule 11.
(1) Every notice of issuance of a workers' disability compensation
insurance policy shall must be reported to the bureau agency
on form WC-400, or its electronic equivalent, insurer's notice of
issuance of policy. If the employer is a partnership, the notice shall must
state the names and addresses of all the partners. If the employer is doing
business under an assumed name, the notice shall must state the
assumed name and each Michigan location covered. If the employer is a
corporation doing business through a number of divisions, the notice shall
must state the names of all the divisions of the corporation. The bureau
agency shall be notified when any insurance company receives a change of
address of an insured.
(2) A form WC-403, or its electronic equivalent, insurer’s notice of name or address change, must be filed when an employer is updating, adding, or deleting information related to a business name, address, or division. Any changes must be specific to the federal identification number noted on the form. Changes to business entities under different federal identification numbers will require separate forms for each number.
R 408.41a Termination of insurance.
Rule
11a. A notice of termination of the liability of an insurance company on a
policy covering the risk of an employer under the act shall must be
reported to the bureau agency on form WC-401, or its
electronic equivalent, notice of termination of liability. A copy of the
notice shall must be mailed to the employer. If the employer is a
partnership, the notice shall must state the names and addresses
of all the partners. If the employer is doing business under an assumed name,
the notice shall must state the assumed name and the names of all
parties doing business under the assumed name. If the employer is a corporation
doing business under a number of divisions, the notice shall must state
the names of all the divisions of the corporation. If a business changes names
notice shall must be given stating both the new and former names.
Notice of termination of a policy which has expired shall may not
be reported when the insurance carrier has accepted responsibility under a
further or renewal policy, except for an assured's name change.
R 408.41b Notice of election to be excluded as employees under act.
Rule
11b. (1) A notice of election to be excluded under section 161(4) and (5)
of the act, MCL 418.161, shall must be reported to the bureau
agency on form WC-337, or its electronic equivalent,
notice of exclusion. The employer shall have the notice notarized. If the
employer is a partnership or corporation, then the notice shall must state
the names of all the partners or corporate officers. If the employer is doing
business under an assumed name, then the notice shall must state
the assumed name and each Michigan location covered.
(2) The
employer shall certify that the employees signing the exclusion comprise all of
the employees of the employer. The employer shall further certify that all
employees are eligible to be excluded under section 161(2) or (3) of the act,
MCL 418.161. Each employee shall furnish his or her social security number
and certify that the employee voluntarily signed the election to be excluded.
The employer shall furnish its federal identification number. The employer
shall furnish each employee with a copy of the completed exclusion form before
filing the form with the bureau agency. The exclusion shall
become is effective upon receipt of the notice of exclusion by the bureau
agency.
R 408.41c Notice of election to terminate exclusion as employees under act.
Rule
11c. (1) Every notice of election to terminate an exclusion from
coverage previously filed under section 161(4) and (5) of the act shall
must be reported to the bureau agency on form WC-338,
or its electronic equivalent, notice to terminate exclusion. The
employer shall have the notice notarized. The notice shall must state
the reason for terminating the exclusion. The notice to terminate exclusion shall
must certify that all employees and the employer signing the notice to
terminate exclusion have received a copy of the completed notice to terminate
exclusion before filing the notice with the bureau agency. The
employer shall furnish its federal identification number.
(2) The
termination of exclusion shall become is effective not
later than 20 days after the notice to terminate exclusion is received by the bureau
agency. If a carrier is providing coverage at the time the notice to
terminate exclusion is filed, or assumes coverage during the 20-day period,
then the notice to terminate exclusion shall become is effective
on the date the carrier assumes coverage.
R 408.42 Application for specific risk insurance policy to cover specified construction
site.
Rule 12.
An applicant may make written application to the bureau of workers’
disability compensation agency for permission to obtain a specific
risk insurance policy to cover all employers on a specified construction site
where the cost of construction will be more than $65,000,000.00 and the
contemplated completion period will be 5 years or less. The application shall
must give sufficient detail to specify the location of the proposed
construction site, a breakdown of the total cost, and the contemplated
completion period for the construction. After considering the application and
all supportive data, the bureau agency shall either grant
approval or advise the owner of the requirements to be met before approval is
granted. The applicant shall must be given 30 days from the
receipt of the bureau agency’s notice in which to comply with the
requirements of the bureau agency. The approval for a specific
risk policy is not effective until the bureau agency has received
proof that all requirements of the bureau agency for issuance of
a specific risk policy to cover a specified construction site have been met.
The applicant, at the discretion of the director, may be granted additional
time to meet the requirements for approval of a specific risk policy. A request
for an extension of time shall must be made in writing within the
30-day compliance period. If the bureau agency does not receive
proof that all requirements for the approval of a specific risk policy for a
specified construction site have been met within the time prescribed, then the
application shall be is considered withdrawn.
R 408.42a Notice of insurance; specified construction site insurance policy.
Rule
12a. If an insurance policy is issued to cover a specified construction site
where the cost of the construction will be more than $65,000,000.00 and the
contemplated completion period will be 5 years or less, then the insurers
shall notify the bureau agency on a form WC-400aA,
insurer’s notice of issuance of specific risk policy, of the date upon
which the employer became subject to the specific insurance policy. If the
employer is a partnership, then the notice shall must state the
names and addresses of all the partners. If the employer is doing business
under an assumed name, then the notice shall must state the
assumed name and the names of the parties doing business under the assumed
name. If the employer is a corporation doing business through a number of
divisions, then the notice shall must state the name of the
employer and the divisions that are covered under the specific risk policy. The
specific risk carrier shall notify the bureau agency when the
specific risk carrier receives a change of address for the employer.
R 408.42b Termination of insurance; specified construction site insurance policy.
Rule
12b. (1) A notice of termination for coverage of an employer under an
insurance policy covering the specified construction where the cost of construction
will be more than $65,000,000.00 and the contemplated completion period will be
5 years or less, shall must be reported to the bureau agency
on form WC-401aA, notice of termination of liability for
employer under specific risk policy.
(2) The
insurer shall mail a copy of the notice to the employer. If the employer is a
partnership, then the notice shall must state the names and
addresses of all the partners. If the employer is doing business under an
assumed name, then the notice shall must state the assumed name
and the names of all parties doing business under the assumed name. If the
employer is a corporation doing business under a number of divisions, then the
notice shall must state the name of the employer and the
divisions of the corporation covered by the termination. If the business
changes names, then notice shall must be given stating both the
new and former names. Notice of termination of a policy which that has
expired shall must not be reported when the specific risk carrier
has accepted responsibility under a further or renewal policy, except for an
assured’s name change. The termination notice shall must be filed
with the bureau of workers’ disability compensation agency
at Lansing, Michigan, not less than 20 days before the effective date of any
termination or cancellation of the policy with respect to the employer. The
notice shall must give the date of termination or cancellation of
the contract or policy with respect to the employer. Termination or
cancellation of the specific risk policy takes effect, with respect to the
employees of the insured employer, 20 days after notice of a proposed
termination or cancellation is received by the bureau agency of
workers’ disability compensation.
R 408.43 Employer self-insured application; combinable entities.
Rule 13.
(1) An employer who applies for the authority to become an individual
self-insurer shall apply to the bureau agency on form WC-402,
or its electronic equivalent.
(2) The
initial and annual renewal application shall must contain answers
to all questions, shall include all requested supporting information, as
directed, and shall be sworn to by an authorized representative of the
employer whose signature is notarized.
(3) Separate legal entities may be self-insured under a single authority if they are majority-owned by the self-insured entity submitting the application or if the same person or group of persons owns a majority interest in each entity on a single application. "Majority interest" of a corporation means ownership of a majority of the voting stock or authority to appoint a majority of directors, if there is no voting stock. "Majority interest" of a partnership means majority partnership interest by the same person or group of persons. "Majority interest" in a limited liability company means majority member ownership by the same person or group of persons.
R 408.43a Employer individual self-insurer; surety bond or letter of credit; consideration of employer in business less than 5 years; excess liability insurance; required guaranties; claims service companies; self-administered claims.
Rule
13a. (1) A nonpublic self-insurer may be required to furnish a surety bond or
letter of credit. The bureau agency will establish the amount of
security at the time of initial application. The bureau agency
shall review the adequacy of security periodically. The bureau agency
shall prescribe the format and language of the bond or letter of credit. The bureau
agency shall accept surety bonds only from a surety writer authorized to
transact security bond business in Michigan. A surety bond shall must
provide for 60 days' notice of cancellation to the bureau agency.
Letters of credit are administered under R 408.43q.
(2) An
employer that is in business less than 5 years shall may not be
considered for self-insured authority unless its workers' disability
compensation liability will be guarantied by a parent corporation or combinable
affiliated entity that has been in business not less than 5 years and that
would qualify for self-insured authority in Michigan.
(3) The bureau
agency shall require specific excess liability insurance, with policy
limit and retention acceptable to the bureau agency, for every
self-insured employer, unless the bureau agency, at its
discretion, waives the requirement. The bureau agency may
require aggregate excess liability insurance as a condition of approval for a
self-insured employer. Specific and aggregate excess
liability insurance policies are accepted under R 408.43k.
(4)
Parent corporations shall guaranty all liability incurred by their self-
insured subsidiaries under the workers' disability compensation act, unless the
bureau agency, at its discretion, waives the requirement. The bureau
agency shall prescribe the form and substance of the guaranties. The bureau
agency may require employers, combinable under a single self-insured authority,
to execute workers' disability compensation payment guaranties as a condition
for approval of the self-insured authority. The bureau agency
shall prescribe the form and substance of the guaranties.
(5) A
self-insurer approved under section 418.611(1)(a) of the act, MCL 418.611,
shall contract with a claims service company approved by
the bureau agency under R 408.43m. The bureau agency
may approve a self-insurer to self-administer claims if the employer has all
necessary systems, processes, and reporting capabilities and can demonstrate it
has employed competent claims personnel with Michigan workers' compensation
adjusting experience.
R 408.43b Employer
individual self-insurer; compliance with bureau agency
requirements; notice; additional time; certification; renewal application.
Rule
13b. (1) If the agency approves an initial application of an employer to be an
individual self-insurer, then the approval shall must be in
writing. The approval letter shall must contain the excess
liability insurance terms, bond, letter of credit, and guaranties required by
the agency as a condition of the self-insured authority. The employer has 30
days from the receipt of the agency’s notice in which to comply with the
requirements of the agency. The self-insured authority shall may not
become effective until the agency has received proof that all requirements of
the agency for self- insured authority have been met.
(2) The
employer may, at the discretion of the agency, be granted additional time to
meet the requirements for the self-insured authority. An employer shall make a
request for an extension of time in writing within the 30-day compliance
period. If the agency does not receive proof that all requirements for the
self-insured authority have been met within the time prescribed, then the
application shall be is considered withdrawn.
(3) The
agency will issue a letter certifying self-insured authority to the employer
when the employer meets the requirements of the agency. The self-insured
authority for all approved employers expires on the designated renewal date,
which shall may not be more than 12 months from the effective
date of the authority. A self-insured employer shall submit a renewal
application (form WC-402R), or its electronic equivalent, and
requested documents, including a current financial statement and loss
information, to the agency 30 days before the expiration of the self-insured
authority. Upon receipt of a renewal application, the authority shall be
is extended until denied or approved for an additional 12 months.
R 408.43c Financial, loss experience and liability exposure analysis; notice of denial
or termination.
Rule
13c. (1) The bureau agency may decline to approve an application
for, or may terminate the self-insured authority, if an employer is
unable to demonstrate a position of reasonable solvency and the ability to pay
benefits as prescribed in the act. The bureau agency analysis of
each nonpublic employer application shall include a review of the employer’s
financial position and operating results. Standard financial ratio analysis and
comparison to similar industry statistical data will be considered in the
financial position analysis. Other information relevant to the applicant’s
financial ability, including, but not limited to the following, will be
considered:
(a) The historical operating results.
(b) Evaluation of financial trends.
(c) Banking relations.
(d) Contingent liabilities.
(e) Pending litigation.
(f) Corporate guaranties.
(g) Management team continuity and experience.
(h) General and specific industry economic conditions.
(i) Legal structure.
(2) The
bureau agency’s analysis of the employer’s loss experience and
liability exposure shall include, but is not limited to, the
following:
(a) Claims for not less than 3 policy years broken down by paid, reserve, and total incurred amounts.
(b) Number of employees.
(c) Payroll code classifications.
(d)
Excess liability insurance policy terms. will be required and considered in
the determination of financial ability.
(23)
The bureau agency shall mail notice of a denial or termination of
self-insured authority to the employer. The notice shall must include
the grounds for denial or termination. The employer may request a hearing in
accordance with section 418.611(5) of the act, MCL 418.611, and R
408.43n.
R 408.43d Group self-insurers; application.
Rule
13d. Application for group coverage, as contemplated in section 611 of the act,
MCL 418.611, for the express purpose of establishing a group self-insurers'
fund, to be administered under the direction of an elected board of trustees
and to provide workers' compensation coverage for a group of private
employers in the same industry or for public employers of the same type of
unit, shall must be made to the bureau agency. The
application shall must be made on a form prescribed by the bureau
agency and shall contain answers to all questions. Answers shall
must be given under oath.
R 408.43e Group self-insurers; new and renewal application requirements.
Rule
13e. (1) A new application, as submitted by the initial board of trustees
of the self-insurer's fund, shall must be accompanied by all
of the following:
(a) A copy of the approved bylaws of the proposed group self-insurers' fund.
(b) An
original signed A copy of the original individual member
application approved by the board of trustees for each member of the
group applying for coverage in the fund.
(c) A current financial statement of each member of a private self-insurers' group that, taken collectively, shows both of the following:
(i) The
combined net assets of all members applying for coverage on the inception date
of the fund, which shall may not be less than $1,000,000.00.
(ii)
Working capital, which shall must be in an amount that
establishes the financial strength and liquidity of the business.
(d) A composite listing of the estimated standard premium to be developed by each member of the group individually and in total as a group.
(e) Proof of payment by each member of not less than 25% of the estimated annual standard premium into a designated depository.
(f) An
excess insurance policy which that is issued by an authorized
carrier in an amount acceptable to the bureau agency and which
is in compliance complies with the requirements set forth in R
408.43k.
(g) A copy of a signed service agreement that designates an approved service company.
(h) A copy of the current contract or agreement between the trustees and the administrator if one is used.
(i)
Proof of a fidelity policy in a form and amount acceptable to the bureau
agency.
(j) If
required, a surety bond written by an authorized carrier or other security in a
form and amount acceptable to the bureau agency.
(k) In
the case of a private employer's group, an indemnity agreement jointly and
severally binding the group and each member of the group to comply with
the provisions of the act. The indemnity agreement shall must conform
to an indemnity agreement as approved by the bureau agency.
(l) A breakdown of all rates by code classification that will be used by the group fund to develop final audited premium, including an exhibit that shows all administrative expenses as a percentage of estimated final audited premium and loss fund developed under the aggregate excess contract as a percentage of final audited premium.
The
premium collected from each member shall must be based upon
applying the appropriate manual rates per payroll code classification as
approved by the bureau agency and the excess carrier. The
premium collected from each participant in a group self-insurance
program shall must be adjusted by an experience
modification formula approved by the bureau agency.
The
total premium collected from all participants shall must be
sufficient to fund the loss fund developed under the excess insurance
contract and the total administrative expenses of the group fund. A
written excess insurance policy shall must confirm that
the rate structure proposed by the aggregate excess insurer will be used
by the group fund to develop the loss fund under the aggregate
excess contract. The loss fund shall be 75% of final audited premium or
as approved by the bureau agency.
(n)
Proof, satisfactory to the bureau agency, shall must be
provided to prove that the fund has, within its own organization, ample
facilities and competent personnel to service its own program with respect
to underwriting matters and loss control services or the fund shall
contract with an approved service company to provide the services. An
approved service company shall must be used to handle claims
adjusting and reporting of loss data to the bureau agency.
(2) Each
group fund shall submit a renewal application to the bureau agency
30 days before the expiration of the self-insurance privilege, together
with the terms of renewal for the excess insurance contract. Upon receipt
of the renewal application, the self-insurance privilege shall be is
extended until it has been acted upon by the director. The application shall
must be accompanied by all of the following:
(a) Evidence of the financial ability of the group to meet its obligations under the act.
(b)
Confirmation of an excess insurance policy which that is
issued by an authorized carrier in an amount acceptable to the bureau
agency and which is in compliance complies with the
requirements set forth in R 408.43k. With the approval of the director and
after meeting all requirements the director imposes, a group self-insurance
fund may use a letter of credit in place of aggregate excess insurance if
the fund gives the bureau agency 6 months' notice of its intent
to use a letter of credit.
(c) A
copy of a signed service contract which that designates an
approved service company, which provides for claims administration and
reporting of loss data to the bureau agency, and which
may include underwriting and loss control services, unless approval has
been granted to self-administer claims.
(d)
Proof of a fidelity policy in a form and amount acceptable to the bureau
agency.
(e) A
breakdown of all rates by code classification that will be used by the group
fund to develop final audited premium. If aggregate excess insurance
is required by the bureau agency, the rates used by the fund
to develop final audited premium shall must be the rates used
by the aggregate excess insurer and shall be included as an
exhibit to the aggregate excess insurance policy. In addition, an
exhibit that shows all administrative expenses as a dollar amount and a
percentage of estimated final premium and the loss fund developed under
the aggregate excess contract as a percentage of final audited premium shall
must be provided.
(f) A copy of the current contract or agreement between the trustees and the fund administrator, if one is used.
(g)
Proof provided by the trustees that the premium collected from each member shall
be is based upon applying the appropriate manual rates per payroll
code classification as approved by the bureau agency and the
excess insurance carrier or consulting actuary. Each member's premium shall
must be experience rated. The experience modification formula shall
must be approved by the bureau agency. The total premium
collected from all participants shall must be sufficient to
fund all administrative expenses and the estimated loss fund developed under
the excess insurance contract. The loss fund shall must be 75%
of final audited premium or as approved by the bureau agency.
If a letter of credit is used in place of aggregate excess insurance,
the fund shall collect sufficient premiums to fund the ninetieth
percentile confidence level of losses, as calculated by a consulting
actuary, and all administrative expenses. If a public employer group
fund operates with specific excess insurance only, the fund shall
collect sufficient premiums to fund the ninetieth percentile confidence
level of losses, as calculated by a consulting actuary, and all
administrative expenses of the fund.
(h) If the fund intends to provide underwriting and loss control services, the fund shall provide proof that the fund has ample facilities and competent personnel to service the programs.
(i) If the fund requests approval to self-administer claims, then all of the following must be provided:
(i) Proof that the fund has been in operation not less than 5 years.
(ii) Proof that the fund has annual collected premium of more than $10,000,000.00.
(iii) A written document in which the fund agrees to all of the following provisions:
(A) The fund will demonstrate that the estimated cost of self-administration of the claims program will be fully funded by premium collections.
(B)
The fund will demonstrate that it has ample facilities and competent staff,
including licensed adjusters with workers' compensation qualifications under
chapter 12 of the insurance code of 1956, 1956 PA 218,Act No. 218 of
the Public Acts of 1956, as amending , being MCL 500.1200 S500.1201
to 500.1247, et seq. of the Michigan Compiled Laws, who will be
handling the workers' compensation claims.
(C)
That the claims-handling function will be subject to an annual independent
audit of all established cases and operational processes. The independent
auditor will meet guidelines established by the bureau agency.
(D) That annually, the fund administrator will provide a written assertion to the fund's independent certified public accountant that the fund's claim-paying function maintains an effective internal control structure over financial reporting as of the fund's fiscal year end. The fund's independent certified public accountant shall issue a report on the administrator's assertion in accordance with statements on standards for attestation engagements No. 2 (SSAE#2), as amended.
(E)
The group fund will furnish loss data in a form acceptable to the bureau
agency and the excess carrier.
(F) That failure to provide accurate and timely payment of claims or failure to meet the requirements of self-administered claims may result in termination of approval to self-administer claims.
(G) That the excess insurer will provide documentation of its approval of the group fund's self-administration of claims.
R 408.43f Group self-insurance; same industry requirement; approval; review; certificate.
Rule
13f. (1) After considering an application for group self-insurance and all
supportive data, the bureau agency shall either grant approval
or advise the trustees of the self-insurers' group of the requirements to
be met before approval is granted. In determining whether private employers
are in the same industry, the bureau agency may use
the standard industrial classification codes assigned to each employer
applying for membership in the group. The bureau agency shall
also consider all information available on the nature of the business of
each private employer and may require the group fund to present additional
evidence, either oral or written, to verify that all employers applying
for membership in the group fund meet the statutory requirement of
being in the same industry. The group shall be given has 30
days from the receipt of the bureau’s agency’s notice in which
to comply with the requirements of the bureau agency. The
self-insured authority shall may not become effective until the bureau
agency has received proof that all requirements of the bureau
agency for self-insured approval have been met.
(2) The
group may, at the discretion of the director, be granted additional
time to meet the requirements for the self-insured program. A request for
an extension of time shall must be made in writing by the
group within the 30-day compliance period. If the bureau agency
does not receive proof that all requirements for the self-insured program
have been met within the time prescribed, the application shall be
is considered withdrawn.
(3) On
new and renewal applications, the bureau agency may require
evidence that the proposed rate for each payroll classification is
adequate to cover expected losses for that payroll classification and
evidence that the experience rating formula will be actuarially sound. The bureau
agency shall take all of the following factors into account before
granting approval for a group self-insurance program:
(a) Past and anticipated losses.
(b) Proper reserves for reported and unreported losses.
(c) Past surplus and expected increase in benefit levels.
(d) Administrative costs.
The bureau
agency may contract with a consulting actuary, at the expense
of the group fund, to determine if the proposed group self-insurance program
will be actuarially sound.
(4) Upon
meeting the requirements of the bureau agency, the group shall
receive a formal certificate approving its status as a
self-insurer. The certificate shall expires 12 months after
the effective date of approval.
R 408.43g Group self-insurers' admission of new members; termination of individual members; notice; records.
Rule
13g. (1) After the inception date of the fund, prospective new members
of the fund shall submit an application for membership to the board of
trustees, or its designated representative, on a form approved by the bureau
agency. The board of trustees or its designated representative
may approve the application for membership pursuant to the bylaws of the
group self-insurers' fund. A copy of Tthe original signed
application for membership shall must then be filed with the bureau
agency in Lansing. Membership shall takes effect
after approval by the bureau agency.
(2)
After a group fund has completed 1 year of operation, application may be
made to the director to authorize the group fund to accept new members
without prior bureau agency approval. The application shall
must be submitted on forms provided by the bureau agency
and shall define all businesses that will be accepted in the same
industry within the group. The application shall must define
the financial standards that will be applied by the group in
accepting new members.
(3) If
approved, the group shall submit confirmation of membership to the bureau
agency on form WC-650, or its electronic equivalent, group
self-insurance fund notice of acceptance of membership, together with a
copy of the individual membership application and the financial report
provided by the member. If the employer is a partnership, the notice shall
must state the names and addresses of all the partners. If the
employer is doing business under an assumed name, the notice shall
must state the assumed name and each Michigan location covered. If
the employer is a corporation doing business through a number of
divisions, the notice shall must state the names of all the
divisions of the corporation. The bureau agency shall must
be notified when any group fund receives a change of address of a
member.
(4)
Individual members may elect to terminate their participation in a group
self-insurers' program or be subject to cancellation by the group
pursuant to the bylaws of the group fund. However, termination or
cancellation shall take place may occur not less than 20 days
after the bureau agency has received notice of the
termination or cancellation from the group fund reported to the bureau
agency on form WC-651, or its electronic equivalent, group
self-insurance fund notice of termination of membership. If the employer
is a partnership, the notice shall must state the names and
addresses of all the partners. If the employer is doing business under an
assumed name, the notice shall must state the assumed
name and the names of all parties doing business under the assumed name. If
the employer is a corporation doing business under a number of divisions,
the notice shall must state the names of all the divisions
of the corporation. If a business changes names, notice shall must
be given stating both the new and former names.
(5) The
chairman of the board of trustees or, at the chairman's
designation, the administrator shall be is responsible for
maintaining all records of the fund. The fund shall maintain all of
the following documents, or their electronic equivalents, with respect
to records:
(a) Forms WC-100, 101, 102, WC-701, and WC-107.
(b) Redemption papers.
(c) Excess workers' compensation policies.
(d) Spreadsheets containing premium audit summaries.
(e) Contracts with the group's claims service and administrator.
(f) A complete set of claim loss runs as of the end of each fiscal year.
(g) Certified audit reports.
(h) Minutes of trustee and annual meetings.
(i) Group renewal applications and related documents.
(j) Individual membership applications containing signed indemnity agreements.
The
records shall must be retained for not less than 30
years and the administrator or board of trustees shall know the location of
the records at all times. All records of the fund are the property of the
fund. If the records are held by the funds service company, the
records shall must immediately be surrendered to the fund upon
the fund's request.
R 408.43h Group self-insurance; reports and filings.
Rule 13h. (1) The group shall make all reports and filings required of carriers by the act. In addition, the group fund shall comply with all of the following provisions:
(a) The financial position of the group fund shall be reported, by the trustees or their designated representative, on a quarterly basis for each open fund year. The report is due within 30 days after the quarter ends.
The
format for the report may be prescribed by the bureau agency.
A fund year shall be is considered open as long as there are
unsettled claims. The annual financial statements shall must
be audited by a certified public accountant and filed with the bureau
agency within 180 days after the fund year ends.
If a
fund ceases to provide coverage on an ongoing basis, annual audited
financial statements shall must be provided to the bureau agency
within 180 days of the end of the fund's fiscal year.
(b) The
fund shall file summary loss data, in a manner prescribed by the bureau
agency, on each fund year within 30 days after the evaluation
date. Losses shall must be evaluated on a monthly basis or as
required by the bureau agency.
(c) The
fund shall file a copy of the minutes of all trustee meetings with the bureau
agency within 30 days after the meeting.
(d) The
fund shall provide reports or filings on payroll audits,
investments, experience rating, or any other information concerning the
group fund upon specific request of the bureau agency.
(e) An authorized representative of the fund shall sign Aall financial reports and minutes submitted.
(2) A
fund that fails or refuses to file the reports specified in this rule within
the time limits prescribed may be notified that its authority to be
self-insured will be terminated. If a fund's authority is terminated, then
the fund shall must be notified of the grounds for termination.
The fund may request a hearing in accordance with R 408.43n.
R 408.43i Group self-insurer's fund; board of trustees' power and duties; investment restrictions.
Rule
13i. To ensure the financial stability of each group self-insurers' fund, a
board of trustees of each fund shall be is responsible for all
operations of the fund. A board of trustees shall be is a group
of members elected by the membership of the fund for stated terms of office.
The majority of the trustees shall must be owners or employees of
members of the self-insurers' fund, but a trustee shall may not
be an owner, officer, or employee of a service company. The board of trustees
of each fund shall take all necessary precautions to safeguard the assets of
the fund, including all of the following:
(a) Designate a trustee as administrator or, in the alternative, hire an employee or designate an individual to act as the group fund administrator. The trustees may delegate to the administrator the duties they determine proper. The duties may include, but are not limited to, advising the board with regard to any of the following:
(i) Contracting with a service company.
(ii) Determining the premium charged.
(iii) Investing surplus moniesmoney,
subject to the restrictions set forth in this rule.
(iv) Accepting applications for membership. However,
the board of trustees remains the responsible party for the operation of the
fund. The duties delegated to the administrator and all compensation to be paid
to the administrator shall must be reduced to writing, and a copy
shall be provided to the agency with each annual group renewal
application. The group fund administrator shall may not be an
owner, officer, or employee of a service company. The trustees shall purchase a
fidelity policy covering the fund trustees, administrator, employees of the
fund, and the service company in an amount sufficient to protect the assets of
the fund. A copy of the fidelity policy will be provided to the agency with
each annual renewal.
(b)
Limit disbursements to payment and expenses of handling claims and
administrative expenses necessary for operating the fund. The board of trustees
shall also establish necessary accounts and accounting procedures for control
and accurate financial reporting. Established accounting procedures shall
must provide accurate financial information for each open year
individually with respect to revenue and expense until the year is closed out.
The board of trustees shall maintain, and be responsible for, all records and
documents relating to the formation and ongoing operation of the group
self-insurance fund. If the board of trustees does not maintain the records in
a responsible manner and in accordance with these rules, then the self-insured
approval of the fund may be terminated by the director.
(c)
Audit the accounts and records of the fund annually or at any time required by
the agency. Audits shall must be made by certified public
accountants or by authorized representatives of the agency. The agency reserves
the right to prescribe the type of audits to be made and the uniform accounting
system to be used by the self-insurers' fund to enable the agency to determine
the solvency of the group self-insurers' fund. Copies of financial audits
prepared by certified public accountants shall must be filed with
the agency in Lansing within 180 days after the close of the fund year. Claim
reserve audits used in support of surplus distribution requests shall must
be performed by auditors who meet the requirements of the agency relating to
independence, report content, and timing.
(d) Not extend credit to individual members for payment of premium.
(e) Apply a penalty rate in excess of the normal premium to any risk that has unfavorable loss experience, if the member and the agency are notified in writing before the effective date of the change in rates.
(f) Not
utilize any of the monies money collected as premiums for any
purpose unrelated to workers' compensation. Further, the board of trustees
shall not borrow any monies money from the fund or in the name of
the fund without advising the agency of the nature and purpose of the loan and
obtaining agency approval. The board of trustees may, at its discretion, invest
any surplus monies money not needed for immediate cash needs, but
the investments shall must be limited to United States government
bonds, United States treasury notes, United States government agency issues,
United States government-sponsored enterprises, investment share accounts in
any savings and loan association and credit unions that have their deposits
insured by a federal agency, and certificates of deposit issued by a duly
chartered commercial bank. Deposits in savings and loan associations, credit
unions, and commercial banks shall must be limited to
institutions in this state and shall may not exceed the federally
insured amount in any 1 account, except that the federally insured amount in
any 1 account in a commercial bank may be exceeded if the account amount
involved does not exceed either of the following factors:
(i) Five percent of the combination of surplus and undivided profits and reserves as currently reported for each bank in the state in the banking division annual report of the office of financial and insurance regulation.
(ii)
Five hundred thousand dollars per institution. A group self-insurance fund
shall not invest in mutual funds, except that investments in money market
mutual funds of short-term duration which invest only in government agency
issues, government-sponsored enterprises, and government bills, bonds, and notes
will be are allowed for short-term cash investment needs. As used
in this paragraph, "short-term duration" means 180 days or less.
(g) The
board of trustees of a group self-insurance fund, subject to the limitations
set forth in subdivisions (h), (i), and (j) of this subrule, may, in its
discretion, and upon contracting with a bank trust department or with a
professional investment advisor registered with the securities and exchange
commission under the investment advisors act of 1940, 15 U.S.C. '80B-3, invest monies
money not needed for immediate cash needs in corporate bonds and
municipal bonds and common and preferred stock.
(h)
Limit the combined holdings of corporate and municipal bonds to not more than
45% of the market value of the available investment portfolio. Corporate and
municipal bonds must be (A) rated or better by at least 2 nationally recognized
rating services. Holdings in any 1 corporation or municipality shall may
not be more than 5% of the total amount eligible for investment in
corporate and municipal bonds as set forth in this subrule.
(i) Of
the 45% of the market value of the investment portfolio available for
investment in municipal or corporate bonds, 45% may be invested in common or
preferred stocks. Common or preferred stocks shall must be
limited to publicly owned companies that trade on a United States regulated
exchange. Mutual funds or bank pooled funds that invest in common or preferred
stocks are permitted and shall must be calculated as part of the
percentage of market value available for investment in common and preferred
stocks.
(j)
Ensure that the professional investment advisor completes a compliance review
of the investment portfolio on a quarterly basis. A copy of the investment
review shall must be provided to the fund and the agency within
30 days of the close of each quarter. The annual financial statements shall
must be audited by a certified public accountant and shall
include a certification as to whether the fund has been in compliance complied
with the requirements for investments. Failure to report on investments as
required by this rule may result in withdrawal of the authority to invest in
corporate bonds, and municipal bonds, and/or common
stocks, or and preferred stocks.
(k) Any
group fund found to have investments in vehicles other than as provided by this
rule shall be given has 30 days or a time period approved by the
director to divest themselves of the investments. Failure to meet the
divestiture requirement may subject the fund to further sanction by the
director.
R 408.43j
Group self-insurers' funds; advance premium discounts; surplus moniesmoney;
surplus investment income and premiums; unfunded claims.
Rule
13j. (1) The trustees of any group self-insurers' fund shall not authorize
advance premium discounts to any member in excess of those authorized by
the excess insurance underwriter and approved by the bureau agency.
If discounts are approved by the excess carrier and the bureau agency,
the excess carrier shall agree to base the loss fund on the premium collected
after discount.
(2) Any
surplus monies money for a fund year in excess of the amount
necessary to fulfill all obligations under the act for that fund year,
including a provision for claims incurred but not reported, may be declared to
be refundable by the trustees at any time, and the amount of the declaration shall
be is a fixed liability of the fund at the time of the
declaration. The date of payment shall be is as agreed to by the
trustees and the bureau agency, except that monies money
not needed to satisfy the loss fund requirements, as established by
the aggregate excess contract, may be refunded immediately after the end of
the fund year with the approval of the bureau agency. The intent
of this rule is to ensure that sufficient monies money are
is retained so that total assets are greater than total liabilities for
each fund year.
(3) If
premiums collected and earned investment income associated with any fund year
are insufficient to completely fund all reported claims and expenses for that
year, unfunded amounts, by fund year, shall must be reported
immediately to the bureau agency with the proposed plan to
achieve 100% funding. The plan to achieve 100% funding for all claims is
subject to bureau agency approval. A plan may include, but is
not limited to, all of the following:
(a) Use of premiums collected in other fund years, but not necessary for payment of claims or expenses in the year collected.
(b) Use of investment earnings associated with other fund years, but not necessary for payment of claims or expenses in the year in which associated.
(c)
Assessment of members by order of the bureau agency.
(4)
The bureau agency may allow investment income earned
by a group self-insurance fund during a calendar year to be returned
to the fund membership without prior bureau agency approval
if the fund trustees provide all of the following documentation:
(a)
Certification, to the bureau agency, in the form of a letter from
a certified public accountant, attesting to the amount of investment income
earned during the calendar year.
(b)
Certification to the bureau agency, by the board of trustees, of
the amount of the investment income and of the employers to whom the investment
income is to be distributed.
(c) Certification by the board of trustees and the group's certified public accountant that, after the distribution of investment income, the aggregate retention in the current fund year, as determined by the group's excess insurance carrier, and all administrative expenses will be fully funded.
(d) If the fund operates with specific excess insurance only or a letter of credit in place of aggregate excess insurance, the board of trustees and the group's certified public accountant shall certify that, after the distribution of investment income, ultimate loss, as calculated by a certified actuary at a 90% confidence level, and all administrative expenses will be fully funded.
(e) Certification by the board of trustees and the fund's certified public accountant that the fund's financial statements are not discounted and do not consider the time value of money.
The
information specified in subdivisions (a) to (e) of this subrule rule
shall must be received by the bureau agency not
earlier than December 1, and not later than December 31, of the calendar
year in which the investment income is earned and is to be distributed. If
the information specified in this rule is not received by the bureau agency
in a timely manner, then the bureau agency may withdraw the
fund's privilege of returning investment income to fund members
without prior bureau agency approval.
R 408.43k Aggregate excess liability insurance; specific excess liability insurance;
individual self-insurer; group self-insurer.
Rule
13k. The bureau agency shall not recognize a policy of aggregate
or specific excess liability insurance in considering the ability of a
self-insurer to fulfill its financial obligations under the act, unless the
policy is issued by a casualty insurance company authorized, as defined in
section 108 of the insurance code of 1956, 1956 PA 218, MCL 500.108.,
to transact such business in this state. The policy shall must comply
with all of the following provisions unless specifically waived by the bureau
agency. Policies issued that do not comply with all provisions of this
rule may be considered grounds for termination of the employer's
self-insured authority.
(a) The
policy shall may not be cancelable or nonrenewable unless
written notice, sent by courier, registered mail or certified mail, is given
to the other party to the policy and to the bureau agency not
less than 60 days before termination by the party desiring to cancel or not
renew the policy.
(b) The
policy shall may not contain no endorsements,
provisions, or terms that increase the named insured or insureds retentions
or increase the amount that must be paid by the named insured or insureds
beyond the retentions reported on the declarations page of the policy and
the Michigan certificate of specific/aggregate excess liability insurance.
This provision does not apply to customary policy language that may call for
increased payments by the insured or insureds for failure to act or abide by
a policy provision.
(c) A
policy that has any type of commutation clause shall must provide
that any commutation effected under the policy shall may
not relieve the casualty insurance company of further liability with respect
to claims and expenses unknown at the time of the commutation or in regard
to any claim apparently closed at the time of initial commutation that is
subsequently reopened by or through a competent authority. If the casualty
insurance company proposes to settle its liability for future payments
payable as compensation for accidents occurring during the term of the
policy by the payment of a lump sum to the employer, to be fixed as provided
in the commutation clause of the policy, then the casualty insurance company or
the company's agent shall give the bureau agency not less then
than 30 days' prior notice of the commutation. Notice shall must
be by courier, registered mail, or certified mail. If any commutation is
affected, then the bureau agency has the right to direct that the
sum be placed in trust for the benefit of the injured employee or employees
entitled to future payments of compensation.
(d) The
policy shall must state that if a private self-insured
employer becomes insolvent and is unable to make compensation payments and
the self-insurers' security fund may have responsibility for making payment
under section 537 of the act, MCL 418.537, then the excess insurance
carrier shall make, directly to the claimants or their authorized
representatives, payments as would have been made by the excess insurance
carrier to the employer after it has been determined that the retention
level has been reached on the excess liability insurance policy.
(e) The
policy shall must state that 100% of the following payments shall
must be applied toward reaching the retention level in the specific
and aggregate excess liability policy:
(i) Benefit payments made by the employer as required in the act.
(ii) Benefit payments, as required in the act, that are due and owing to claimants of the employer.
(iii) Benefit payments made on behalf of the employer, as required in the act, by a surety under a bond or through the use of other security required by the director.
(iv) Payments made by the self-insurers' security fund.
(v) Usual and customary claims allocated loss adjustment expenses.
(vi)
Payments made, as specified in paragraphs (i), (iii), (iv) and (v) of this
subdivision, that are reimbursable by the specific excess liability policy shall
may not be considered in reaching the aggregate excess liability
retention.
(f) The
policy shall must provide for 100% reimbursement of the
following payments that exceed the retention levels as defined in the
specific or aggregate excess liability policy:
(i) Benefit payments made by the employer as required in the act.
(ii)
Benefit payments made on behalf of the employer as required in the act by a
surety under a bond or through the use of other security required by the bureau
agency.
(iii) Payments made by the self-insurers' security fund.
(iv) Usual and customary claims allocated loss adjustment expenses.
(g)
Reimbursement shall be is pro rata if multiple excess insurers
insure the same self-insured for the same period. A request to waive a
provision of this rule shall must be in writing and approved by
the bureau agency before a policy is issued. The carrier shall
confirm issuance of an aggregate or specific excess liability policy on a
form prescribed by the bureau agency.
R 408.43m Servicing self-insured employers or groups; application; requirements;
noncompliance.
Rule 13m.
(1) An individual, partnership, limited liability company, or corporation
that desires to engage in the business of providing 1 or more services for
an individual self-insurer or a self-insurers' group, shall apply to the bureau
agency before entering into a contract with the individual or group
self-insurer and shall satisfy the bureau agency that it
has adequate facilities and competent staff with Michigan workers' compensation
adjusting experience within the state to service a self-insured program in a
manner that fulfills the employers' obligations under the act and the rules
of the bureau. Workers' compensation claims of Michigan individual or
group self-insured employers shall be handled within the state of Michigan by
its staff, except that the director, at his or her discretion, may permit an
approved service company to handle the claims of a Michigan individual
self-insurer outside of this state upon specific written request by the individual
self-insurer and the service company. The request for permission shall
must set forth documentation sufficient to the agency that claims
will be handled pursuant to Michigan law, administrative rules, and agency
policy. The director will respond to the request in writing, giving the
reasons for denial, or if approved, the conditions of approval. The
approval may be withdrawn by the director at any time based upon the failure
of the service company and/or employer, or both, to comply
with the conditions of the approval. Service may include claims adjusting,
loss control services, underwriting, and the capacity to provide required
reporting. Any individual, partnership, limited liability company, or
corporation that provides claims adjusting or loss control services to
an approved self-insured employer, where the self-insured employer has
designated within its own organization an individual to be responsible to
the bureau agency for its claims program or loss control
services, or both, shall is not be considered a service
company for purposes of this rule.
(2) An
applicant shall apply to the bureau agency for approval to
act as a servicing company for self-insured employers or group funds
on a form prescribed by the bureau agency. The application shall
must contain answers to all questions. An applicant shall give the
answers under oath. The bureau agency shall approve the
application prior to the service company entering into a contract with an
approved self- insurer. Approval to act as a service company for
self-insurers is granted for a period of 1 year and is subject to renewal
annually.
(3) If
a service company seeks approval to service claims for self-insurers,
then it shall submit proof that it has, within its organization,
at least 1 person who has the knowledge and Michigan workers' compensation
adjusting experience necessary to handle claims involving the act. The service
company shall attach a resume covering the principal person's background to the
application of the service company. The principal individuals adjusting
workers' compensation claims shall hold a current workers' disability
compensation adjuster's license under chapter 12 of the insurance code of
1956, 1956 PA 218, MCL §500.12001 to 500.1247.
(4) If a service company seeks approval to provide underwriting service to self-insurers, then it shall submit proof that it has, within its organization or under contract on a full-time basis, at least 1 person who has the knowledge and experience necessary to provide underwriting services for workers' compensation excess liability insurance coverage. The service company shall attach a resume detailing the principal person's background to the application of the service company.
(5) If a service company seeks approval to furnish loss control services to self-insurers, then it shall submit proof that it has, within its organization or under contract on a full-time basis, at least 1 person who has the knowledge and background necessary to adequately provide loss control and health services.
(6) A service company shall maintain adequate staff in the state. The service company shall authorize staff to act for the service company on all matters covered by the act and the rules of the bureau.
(7) A
service company shall attach to the application a copy of its standard
service agreement that it will enter into with self-insured employers
or group funds. The service company shall certify, in writing, that the service
agreement is in compliance complies with the act and these
rules. The service company shall certify, and include a provision in
its standard service contract which that states, that the
contract provides for the handling of all claims with dates of injury or
disease within the contract until conclusion of the claims, unless the
service company is relieved by the bureau agency, in
writing, of the responsibility for handling claims. If the service contract
calls for additional fees for any reason, then the service company shall
clearly define the additional fees in the contract. For a service
company to be relieved of the responsibility of handling claims to
conclusion, the client, the previous service company, and the new service
company shall sign a claims transfer agreement. The claims transfer agreement
shall be completed on a form prescribed by the bureau agency and
shall include a written request made by the previous service company
to be relieved of its claims handling responsibilities to the bureau
agency. A requesting company is relieved of its claims handling
responsibility only after receiving a written response from the bureau agency
approving a request. The service company shall certify that it will
report to the specific excess insurance carrier or aggregate excess
insurance carrier, or both, and put the specific excess insurance carrier
or aggregate excess insurance carrier, or both, on notice of all claims as
required by the self-insurers' or group self-insurers' insurance
policies. The standard service contract filed with the bureau agency
for approval and renewal of the service company authority shallmust include
language specifically stating that the service company is responsible for
reporting to the excess insurance carrier. The bureau agency may
waive the reporting requirement upon written request to the bureau agency.
Any dispute involving late reporting of excess liability insurance claims and
potential penalties shall must be reported to the bureau
immediately.
(8) A
service company shall certify, and provide for in all service
contracts, that all documents generated or prepared by the service company
for the group or the individual self-insurer or any materials relating to an
individual or group self-insurer held by a service company are the property
of the individual or group self-insurer and shall must be
surrendered to the individual or group self-insurer within 10 days of
termination of the service contract, subject to written request by the
individual or group self-insurer.
(9)
Failure to comply with the provisions of the act constitutes good cause for
withdrawal of the approval to act as a service company for self-insurers. The bureau
agency shall give 30 days' notice of withdrawal. The bureau agency
shall give the notice by certified or registered mail, served upon all
interested parties.
R 408.43n Hearing before director; self-insured status, individual and group fund; group
fund rates, membership applications, security requirements, and surplus refunds.
Rule
13n. (1) Upon receiving a notice of intent to deny or terminate self-insured
status under section 611 of the act, MCL 418.611, a party may request a
hearing before the director within 15 days of the mailing of the notice by the bureau
agency.
Upon
receiving a notice denying a request by a group fund for deviation from manual
rates, denial of an individual membership application or security
requirement, or a denial of a request for a refund of surplus, the group fund
may request a hearing before the director within 15 days of the mailing of
the notice by the bureau agency.
(2) The director
shall, by certified or registered mail, notify the appealing party of
the date, time, place, and reasons for holding the hearing. The
director shall mail the notice not less than 15 days before the hearing. If the
intent to terminate self-insured status is based on the self-insurer’s
failure to maintain existing security requirements, then the notice shall
must advise the self-insurer that proof of reinstatement of the
security shall must accompany the request for hearing or the
director may make a final decision on the termination without further
hearing.
(3) If
an appearance is made at a hearing, then it shall must be made
in person by a duly authorized representative or by counsel.
(4) A
person who has been served with a notice of hearing may, at his or her
option, file a written statement before the date set for hearing or may
appear at the hearing and present an oral statement and other evidence on the
issues contained in the notice of hearing. When written briefs or arguments
are presented, a copy shallmust be served upon the director and
other interested parties not less than 5 days before the date set for the
hearing.
(5) If the person or persons who have requested a hearing fail to appear at a noticed hearing, the director may consider the request for a hearing as having been abandoned or, in his or her discretion, may proceed with a hearing of the case and may, on the evidence presented, make a decision.
(6) A
hearing shall may not be adjourned or continued, except upon an
order of the director.
R 408.43q Irrevocable letter of credit; acceptance; requirements; payment of surety bond
or letter of credit.
Rule
13q. (1) An irrevocable letter of credit may be accepted by the bureau agency
as other security for a self-insured program as provided by section 611(1)(a)
of the act, MCL 418.611. The bureau agency will retain
discretion in each particular case to determine if the letter of credit is
acceptable and if its language and format are satisfactory.
(2)
Irrevocable letters of credit shallmust be issued by a
state-chartered bank, a federally chartered bank, or foreign bank. Funds
shallmust be immediately payable on demand. The director may
require confirmation of acceptable letters of credit from any state,
federally, or foreign chartered bank without state operations or branch
services within this state. If a confirmation is required, it shall be by a
State of Michigan chartered bank or federally chartered bank with Michigan
branch operations and state that the confirming bank is primarily obligated on
the letter of credit.
(3) An employer
who elects an irrevocable letter of credit as other security for a self-insured
program shall furnish a memorandum of understanding with the letter of credit,
on a form provided by the bureau agency, which affirms the
employer's acceptance of all of the following requirements:
(a) A
letter of credit is furnished to the bureau agency instead of a
surety bond as one of the requirements for approval of a self-insured
program.
(b) The
employer understands that the letter of credit shall be is deemed
automatically extended without amendment for 1 year from the expiry date or any
future expiry date unless, 60 days before any expiry date, the bureau agency
is notified, by courier, or certified or registered mail, that
the letter of credit shall not be renewed for any additional period.
(c) A
policy of insurance or a surety bond of equal amount may be furnished at a
later date as a substitute for the letter of credit if the policy of insurance
or surety bond covers all claims that would have been covered by the letter of
credit. All policies of insurance and surety bonds furnished as substitutes for
letters of credit are subject to prior bureau agency approval.
(d) The
employer shall affirm that the irrevocable letter of credit in the amount
requested by the bureau agency is being offered with the
understanding that if the bureau agency receives notice that the
letter of credit will not be renewed, then the bureau agency, in
its discretion, may, after 30 days from the date of receipt of the
notice, call the proceeds of the letter of credit and deposit the proceeds in
the state treasury. And further, if, in the judgment of the bureau agency,
the letter of credit is needed to cover any worker's disability compensation
claims, then the proceeds of the letter of credit shall be called immediately
and deposited in the state treasury for such purpose.
(e) If
legal proceedings are initiated by any party with respect to payment of any
letter of credit, then the proceedings shall beare subject to
Michigan courts and law.
(4) The bureau
agency shall not grant an effective date for a self-insured program
until a completed letter of credit and the memorandum of understanding have
been reviewed and accepted by the bureau agency.
(5) If
it is necessary for the director, under statute and bureau agency
rules, to call the bond or other security, then a trust shallmust
be established with the funds, unless the provider of the bond or other
security elects to handle the claims directly and the bureau agency
approves. If a trust is established, the funds shallmust be
deposited in the state treasury and the state treasurer, as provided by section
551(7)(8) of the act, MCL 418.551, shall be is
the custodian of the trust. The trustees of the trust shall be are
the trustees of the funds denominated in chapter 5 of the act, MCL
418.501 to 418.561, and also those who are appointed as trustees
under section 511 of the act, MCL 418.511. The service company of the
self-insured employer, if any, shall continue to perform in accordance with the
terms of the employer's contract with the service company.
R 408.43r Public employer group funds; waiver of requirement for excess insurance.
Rule
13r. A public employer group fund may request a waiver of the
requirement for excess insurance. The director shall may waive
the requirement for excess insurance for a public employer group fund
if the fund demonstrates that it has sufficient financial strength and
liquidity to assure ensure that all obligations under the act
shall be promptly met without the protection of an excess insurance
policy.
R 408.43s Group funds; insufficient funding; creation of trust; appointment of trustees.
Rule 13s.
(1) If the plan to achieve full funding for payment of all claims
and expenses of the self-insurers group pursuant to rule R
408.43j is not approved by the bureau agency, then the bureau
agency may order the board of trustees of the self-insurers group to
immediately assess the employer members of the group for the full amount of the
deficiency and/or order that any surplus funds distributed to group
members during the previous 12 calendar months from the date of discovery of
the funding deficiency by the group fund be immediately returned, or both.
(2) If
the bureau agency determines that the self-insurers group ceases
to provide ongoing and active coverage to its members and/or the requirements
of this rule are not sufficient to secure all future liability established by
the act workers disability compensation act of 1969, or both,
then the bureau agency may require additional assessment of
the employer members of the group and request the director to create and
establish the terms of a trust, at the expense of the self-insurers group,
for the deposit and administration of any assessment received and/or
all assets of the self-insurers group, or both. The trustees of
the funds appointed under section 511 of the workers' disability
compensation act, MCL 418.511, shall must be appointed
trustees of the self-insurers group trust fund established under this rule.
Rule 14. (1) The limitation in this rule as to fees applies to plaintiff’s attorneys, including combined charges of attorneys who combine their efforts toward the enforcement or collection of any compensation claim.
(2) In a case tried to
completion with proofs closed or compensation voluntarily paid, an
attorney, before computing the fee, shall deduct from the accrued
compensation the reasonable expenses incurred on plaintiff’s behalf.
The fee that the magistrate may
approve shall not be more than 30% of the balance. Reasonable expenses, as used in this
rule, include all of the following:
(a) Fees for reports and depositions of doctors, vocational experts, and other experts incurred in the prosecution of the claim.
(b) Medical examination fees and witness fees.
(c) Any other medical witness fee, including the cost of a subpoena.
(d) Costs of subpoenas, and costs to obtain and copy medical and other records.
(e) The costs of court reporter services, transcripts, subpoena enforcement fees, and certified copies.
(f) Costs of travel to depose medical and vocational witnesses.
(g) Appeal costs.
(h) Other costs or expenses determined by a magistrate to be reasonable for the prosecution of the claim.
(3) In a case involving a redemption of liability, the
attorney, before computing the fee, shall deduct the reasonable
expenses incurred on plaintiff’s behalf from the total settlement. The fee
that the magistrate may approve is as follows:
(a) Of the first $25,000.00, a fee of not more than
15%.
(b) Of any amount more than
$25,000.00, a fee of not more than 10%. In computing the fee, the total settlement includes all
sums paid, or to be paid, to satisfy lienholders, purchase annuities, and fund
medical care set-aside accounts.
(4) In a case
tried to completion with proofs closed but before a final order, after
which there is a redemption of liability, the attorney, before computing
the fee, shall deduct the reasonable expenses incurred on plaintiff’s
behalf from the total settlement. The total settlement in such redemptions
shall be deemed to include the gross amounts of any partial payments made
under section 862 of the act, if the redemption specifically includes a
waiver of the right of reimbursement of such amounts from either the
plaintiff or the second injury fund. The fee that the magistrate may
approve shall not be more than 20% of the balance. In a case where benefits are being
voluntarily paid at time of redemption, and no application for mediation or
hearing (WC-104a) is pending, the magistrate may approve an attorney fee of
15%, or less if requested by the attorney, of the balance recovered for, or for
the benefit of, the plaintiff as provided in section 858(2) of the act, MCL
418.858.
(5) Reasonable
expenses, as used in this rule, include all of the following:
(a) Medical examination fee and witness fee.
(b) Any other medical witness fee, including the cost
of a subpoena.
(c) The cost of a court reporter service.
(d) Appeal
costs. In a case tried to
completion with proofs closed or compensation voluntarily paid after an
application for mediation or hearing is filed, an attorney, before computing
the fee, shall deduct from the accrued compensation the reasonable expenses
incurred on plaintiff’s behalf as defined in subrule (2) of this rule. The magistrate may approve an attorney fee of 30%, or less
if requested by the attorney, of the balance recovered for, or for the
benefit of, the plaintiff as provided in section 858(2) of the act, MCL 418.858.
(6) Subrules
(2) to (4) of this rule apply to a case with an injury date on or after
September 1, 1965. The rule as to attorney fees in effect before September
1, 1965, applies to a case with an injury date before September 1, 1965. In a case involving a redemption of
liability, where a form 104(a) is pending, the attorney before computing the
fee shall deduct the reasonable expenses incurred on plaintiff’s behalf from
the total settlement. The fee that the magistrate may approve is as follows, or
less if requested by the attorney:
(a) Cases alleging dates of injury before September 1, 1965 are subject to the rule as to attorney fees in effect before September 1, 1965.
(b) Cases alleging dates of injury between September 1, 1965 and the effective date of this amendment are subject to the rule in effect on the date of injury.
(c) Cases alleging dates of injury after the effective date of this amendment may be subject to an attorney fee of:
(i) Twenty percent of the first $100,000.
(ii) Fifteen percent of any amount more than $100,000.
.
(7) In a case dismissed for
lack of progress or prosecution or in which the petition for hearing is
withdrawn for reasons other than voluntary payment or other meritorious reasons
and further action is taken by the same attorney or law firm, the fee that the
magistrate may approve in cases specified in subrule (2) of this rule
shall be not more than 25% of the balance; in subrule (3) of this rule,
of the first $25,000.00, not more than 12-1/2%, and of any amount more than
$25,000.00, 10%; in subrule (4) of this rule, the fee shall be not more than
15% of the balance. In a
case tried to completion with proofs closed but before a final order, after
which there is a redemption of liability, the attorney, before computing the
fee, shall deduct the reasonable expenses incurred on plaintiff’s behalf as
defined in subrule (2) of this rule from the total settlement. The total
settlement in such redemptions includes the gross amounts of any partial
payments made under section 862 of the act, MCL 418.862, if the redemption
specifically includes a waiver of the right of reimbursement of such amounts
from either the plaintiff or the second injury fund. The
magistrate may approve an attorney fee of 20% of the balance, or less if
requested by the attorney.
(8) A group disability or hospitalization insurance company that enforces an assignment given to it as provided in the act shall pay a part of the fee of the attorney who secured the compensation recovery in the same proportion that the group insurance company payments bear to the total compensation recovery upon which the attorney’s fee is based.
(9) In the computation of attorney fees in a case decided by the
workers’ compensation appellate commission, the fee shall may be assessed on not more than 104 weeks of the period the
matter was pending before the commission. All other weekly benefits due and
owing for the period of appeal shall must be fully paid to the plaintiff. The limitation of fee applies only to
weekly compensation.
(10) In a case where benefits
are being voluntarily paid at time of redemption, and no application for
mediation or hearing is pending, not more than 10% attorney fee will be
allowed. Nothing in this
rule precludes an award of attorney fees under section 315 of the act, MCL
418.315.
(11) If agreed upon by the plaintiff, survivor, party in interest, or dependents in writing, the fees specified in this rule may apply to cases with earlier dates of injury.
R 408.45 Medical
examination and rehabilitation., and forensic vocational
evaluation.
Rule 15.
(1) Under circumstances prescribed by the director, a A carrier, PEGSISF, first responder presumed
coverage fund, or self-insurers’ security fund shall report to
the bureau agency on form
110, report on rehabilitation, 3 months after the date of injury and after each
subsequent 4 months, what evaluation and what
provision has been made for rehabilitation on all cases for which a final form
WC-701, notice of compensation payments, has not been filed. All
reports shall be accompanied by a current medical report. In case of a specific
loss where the injured employee has returned to work without rehabilitation
before expiration of the specific loss period, a notation of the return to work
shall be made on form 110, report on rehabilitation, and thereafter further
reports shall not be necessary. Where rehabilitation has been undertaken in the
form of favored work or on-the-job training by the employer, the rehabilitation
shall be so identified in all reports.
(2) When
an employee consents to a request by the carrier, first responder presumed
coverage fund, or a fund created in section 501 of
the act, MCL 418.501; or is ordered by the bureau agency to
submit to a medical examination, forensic vocational evaluation, or
rehabilitation; or undergoes any medical treatment related to the
disability, the carrier, first responder presumed coverage fund, or
a fund created in section 501 of the act, shall pay the traveling expenses
incidental to such examination, medical treatment, or evaluation, or
rehabilitation. The employee shall notify the carrier, first
responder presumed coverage fund, or a fund created in section 501
of the act, in writing, of the mileage involved and other expenses. When an
employee is examined at the request of the carrier, first responder presumed
coverage fund, or a fund created in section 501 of the act under the
provisions of section 385 of the act, MCL 418.385, the expenses incidental to
such examination or evaluation shall must be paid in
advance. The traveling expenses shall be are those authorized in
the state standardized travel regulations, except that when special
transportation is medically required, payments shall must be made
at actual cost. Reasonable transportation services may include those
provided by an entity licensed under the limousine, taxicab, and transportation
network company act, 2016 PA 345, MCL 257.2101 to 257.2153. The allowance
for other expenses, if any, shall be are those allowed by this
state. The provisions of this rule do not apply to the first examination
requested by the employer or insurer if all of the following conditions exist:
(a) An application for hearing is filed upon which no payment of compensation or medical expense has been made for 1 year before the date of filing.
(b) The employee’s home at the time of filing the application for hearing is outside of this state.
(c) The citation to appear for examination is at a time reasonably close to the date of hearing so as to obviate the necessity of an additional trip on the part of the employee to attend the hearing.
(3)
Under section 319 of the act, MCL 418.319, the director may, on his or her own
motion or upon receipt of an application from the employee or employer, refer
the employee for an evaluation of the need for a rehabilitation program and the
kind of rehabilitation program necessary to return the employee to work. If a
hearing is requested, then all of the following provisions apply:
(a)
When a request for rehabilitation service is made by the employee or employer,
then the director or his authorized representative may schedule a hearing.
(b)
If the director, on his or her own motion, orders a rehabilitation program,
then he or she shall notify both parties and, if requested by either party
within 15 days, shall schedule a hearing.
(c)
A hearing shall be scheduled within a reasonable time, subject to the
availability of the director or his or her representative and the parties
involved. A request for a hearing shall, at a minimum, contain all of the
following:
(i)
A brief statement of the question concerning rehabilitation.
(ii)
If requested by the employer, a citation of the specific instances of the
employee’s failure to cooperate in the rehabilitation program.
(iii)
If requested by the employee, the type of program requested and the reason for
it.
(d) Unless
a request for review by the Michigan compensation appellate commission is filed
by a party within 15 days after the order of the director is mailed, the order
shall stand as the order of the bureau.
R 408.45a Vocational rehabilitation.
Rule 15a. (1) The agency shall issue vocational rehabilitation provider approval for a period of 3 years. To maintain approved status at the expiration of the provider approval period, a provider shall re-apply by submitting a new form WC-502, or its electronic equivalent, within 90 days before the expiration date of the approval.
(2) Agency-approved vocational rehabilitation providers shall deliver services in a manner that is consistent with agency standards and guidelines, and that are within their professional scope of practice, certification, and licensure. Failure to maintain these standards is grounds for denial or revocation of approval.
(3) Under section 319 of the act, MCL 418.319, the director may, on his or her own motion or upon receipt of an application from the employee or employer, refer the employee to an agency-approved vocational rehabilitation provider for an evaluation of the need for a vocational rehabilitation program and the kind of vocational rehabilitation program necessary to return the employee to a remunerative occupation commensurate with their prior wage earning capacity, which is the primary objective of vocational rehabilitation services. Vocational rehabilitation may include, but is not limited to, evaluation and assessment, counseling, development of the IWRP, job search, job development and placement, education, and retraining. Any expenses incurred under this rule are the responsibility of the carrier, PEGSISF, first responder presumed coverage fund, or self-insurers’ security fund.
(4) A vocational evaluation by an agency-approved provider must take place no later than 119 calendar days from the employee’s last day worked, last day of employment, or when maximum medical improvement has been reached, whichever is later, except in cases where the employee is engaged in reasonable employment. The director may extend this time when there is medical documentation contraindicating the timing of the evaluation, an impending offer of reasonable employment, or other good cause shown by any party on an agency-approved form.
(5) Upon completion of the vocational evaluation, the vocational counselor shall submit an initial evaluation report to the parties within 14 calendar days. If the evaluation recommends initiation of vocational rehabilitation services, including job search activities or training, or both, the following actions must take place:
(a) An IWRP must be provided to all parties for review within 28 days of completion of the vocational evaluation. All plans must comply with the agency’s return-to-work hierarchy.
(b) In the absence of a dispute, the IWRP must be implemented by the vocational counselor within 28 days after submission to the parties for review.
(c) The IWRP must be reviewed and updated by the vocational counselor in concert with the injured worker every 91 days to determine completion status of short- and long-term objectives.
(6) The vocational counselor shall not implement IWRP recommendations beyond the initial evaluation without first securing funding for these services.
(7) When an employee consents to or is ordered by the agency to submit to a vocational rehabilitation evaluation, the carrier, PEGSISF, first responder presumed coverage fund, or self-insurers’ security fund shall pay the traveling expenses incidental to such evaluation pursuant to R 408.45(2). Subsequent expenses related to vocational rehabilitation services provided to meet the objectives of the IWRP are also the responsibility of the carrier, PEGSISF, first responder presumed coverage fund, or self-insurers’ security fund.
R 408.45b Vocational rehabilitation rules disputes.
Rule 15b. Any party may request a vocational rehabilitation hearing before the director or his or her representative, on form WC-104a or form WC-104c, application for mediation or hearing, or an electronic equivalent, and all the following provisions apply:
(a) If the director, on his or her own motion, orders a rehabilitation program, then he or she shall notify all parties and, if requested by either party within 15 days, schedule a hearing.
(b) A hearing must be scheduled within a reasonable time, subject to the availability of the director or his or her representative and the parties involved. A request for a hearing must, at a minimum, contain all of the following:
(i) A brief statement of the question concerning rehabilitation.
(ii) If requested by the employer, a citation of the specific instances of the employee’s failure to cooperate in the rehabilitation program.
(iii) If requested by the employee, the type of program requested and the reason for it.
(c) Unless a request for review by the workers’ disability compensation appeals commission is filed by a party within 15 days after the order of the director is served, the order stands as the order of the agency.
R 408.46 Application for silicosis, dust disease and logging industry compensation fund
and second injury fund benefits.
Rule 16.
(1) An application for reimbursement of benefits from the silicosis, dust
disease and logging industry compensation fund and second injury fund shall
must be made on form WC-112, or its electronic equivalent,
and sent to the principal office of the funds administrator.
(2) A
carrier believing that reimbursement may be due from the second injury fund
under section 372 of the act, MCL 418.372, shall immediately notify the
fund of the potential claim. The fund may then conduct an investigation of the
personal injury and shall must have reasonable time to schedule
medical examinations. If an application petition is filed with
the bureau agency, then the carrier shall add the second injury
fund and the fund shall have the same rights as any other party defendant. The
magistrate shall enter an order determining the liability of the carrier and
the fund.
(3) If
an employee petitions files an application for a hearing under
section 356(1) of the act, MCL 418.356, then the second injury fund shall
be is deemed a party in interest and shall must be
named on the petition application filed by the employee or added
by the carrier when it has knowledge that a claim is being filed under section
356(1) of the act. The fund shall have the same rights as a carrier in the
proceedings.
(4)
Any stipulated order presented for entry which may affect the amount or
duration of benefits or which involves a potential liability on any state fund
created under chapter 5 of the act shall be presented to the magistrate for
entry only after a party provides 10 days’ notice of the date of hearing to all
parties affected or potentially affected. A party shall file proof of service
on the other parties before the hearing date. The magistrate may, at his or her
discretion, require the presentment of proofs in support of the stipulation.
R 408.47 Extensions of time granted by the director.
Rule 17. The director or his or her authorized representative may grant extensions of
time in which to comply with any rule as the director deems reasonable.
R 408.48 Compensation payments; calculation; payment.
Rule 18.
(1) Pursuant to section 313(1) of the act, MCL 418.313, the calculation
of federal income tax, federal insurance contribution act tax, and state income
tax shall be is based on the federal income tax schedule, federal
insurance contribution act tax, and state income tax rate in effect on the
applicable July 1 for which the after-tax weekly wage is determined. The state
law in effect on the applicable July 1 shall be is conclusive in
the determination of the after-tax weekly wage for that calendar year.
(2)
Weekly payments shall must be made payable by check and mailed or
electronically transferred directly to the injured employee or the injured
employee’s dependent, pursuant to subrule (3) of this rule. When the claimant
is represented by counsel, the accrued compensation shallmust be
made payable by check to the person or persons entitled to compensation and
mailed to the attorney representing the person or persons.
(3) Weekly compensation payments may be made by an electronic transfer when both of the following have occurred:
(a) The
claimant consents to and authorizes in writing the use of electronic transfer
payments. This authorization shall is on a claim-by-claim basis, and
must include acknowledgement by the claimant that any amount received
through electronic transfer into the claimant’s account or the account of the
claimant’s dependent at a financial institution may be subject to attachment or
garnishment.
(b) The electronic transfer is made by 1 of the following methods:
(i) Direct deposit or electronic transfer to the claimant’s account or the account of the claimant’s dependent at a financial institution.
(ii) Issuance of a debit card to the claimant or the claimant’s dependent provided that the financial institution complies with all of the following:
(A) Allows the claimant to
receive immediate payment in full at no charge.
(B) Allows at least 1 additional free transaction per pay period for any amount up to the balance accessible through the card.
(C) Fully and prominently discloses any fees and charges.
(D) Prohibits changes in fees or terms of services, as specified in subrule(3)(b)(ii)(F) of this rule to subrule (3)(b)(ii)(G) of this rule. Any other changes to the fees or terms of service may occur when the claimant has received a written notice of these fees at least 21 days prior to the change and the claimant has consented in writing to the change.
(E) Provides a method for the claimant to make an unlimited number of balance inquiries electronically or by telephone and without charge.
(F) Prohibits a link to any form of credit, including a loan against future payments or a cash advance on future payments.
(G) Ensures that the debit card is negotiable at locations easily and readily accessible to the claimant.
(iii) Any other form of payments approved in advance by the director.
(4) A claimant, at any time, may make a request in writing to the employer to change the method of receiving weekly compensation payments established under this rule. The employer shall take no longer than 1 pay period to implement the change after he or she receives the request and any information necessary to implement the request.
R 408.49 Determination of an employee.
Rule 19. If a business entity requests a determination by the director whether 1 or more individuals performing service for the entity in this state are in covered employment, under section 161(n) of the act, MCL 418.161, and Executive Reorganization Order No. 2019-3(7)(l)(5), MCL 125.1998, unless the issue is already pending before the board of magistrates, the director shall issue a determination of coverage of service performed by those individuals and any other individuals performing similar services under similar circumstances. The request must include the names and addresses of all those known to be impacted by the determination. The agency shall provide written notice to all identified individuals and provide an opportunity to be heard prior to making a determination. The business entity seeking the determination shall prominently post, at the business site, notice of any hearing on the request. Any decision rendered pursuant to this rule is not binding on an individual who did not receive notice or was not performing services for the business entity at the time of the closing of proofs.
PART 6. DEFINITIONS
R 408.59 Definitions
and use of terms. Rescinded.
Rule 29. (1) As used
in these rules:
(a) "Act"
means 1969 PA 317, MCL 418.101 to 418.941.
(b) “Debit card” means
a stored value card issued by a federally insured financial
institution that
provides a claimant or the dependent of a claimant immediate access for
withdrawal or transfer
of the claimant’s weekly compensation payments through a
network of automatic
teller machines. “Debit card” includes a card commonly known as
a payroll debit card,
payroll card, or paycard.
(2) Unless the context
of the rule indicates otherwise, the terms “agency” and “director”
shall have equivalent
meaning.
(3) Terms defined in
the act have the same meanings when used in these rules.