Update: Public Act 266 of 2011 Revises Standard for Specific Loss Benefits

In Michigan, The Worker’s Disability Compensation Act provides a specific loss schedule for the loss of a particular finger, toe, hand, foot, eye or limb. Benefits are payable for the period of weeks prescribed in the Act regardless of whether the injured employee returns to work and regardless of whether they would be found to sustain a general disability as a result of the loss.

Prior to the enactment of Public Act 266 of 2011 Michigan courts had ruled that for specific loss claims under Section 361(2) the loss was to be measured in its uncorrected state. Further, the Michigan Supreme Court in Cain v Waste Mgmt, Inc, 465 Mich 509, 638 NW2d 98 (2002), appeal after remand, 472 Mich 236, 697 NW2d 130 (2005), held that specific loss benefits under Section 361(2) did not require actual amputation. It was enough for an employee to show they had lost the use of the limb involved.

The “uncorrected” standard was further clarified by Michigan Worker’s Compensation Appellate Commission in Trammel v Consumers Energy Co, 2009 ACO #126. The Commission in this case held that the claimant had demonstrated a specific loss of the leg, even though his injured knee had been repaired with a surgically inserted implant. As such, the Commission held that the “uncorrected” standard applies even when there is a permanent “correction” to the limb. As a result of the Trammel decision there was an influx of filings by claimants requesting specific loss benefits for the loss of a limb when they underwent knee replacement, shoulder replacement, and hip replacement surgeries.

Public Act 266 of 2011 revises the standard by which specific loss is determined under Section 361(2) of the Act. The new law requires that the effect of any internal joint replacement surgery, internal implant, or other similar medical procedures be considered in a determination of whether a specific loss had occurred. In essence, Public Act 266 of 2011 requires that any specific loss claim must be measured after any possible correction. For instance, in a petition filed by an employee who alleges the specific loss of a leg for an injury that requires a total knee replacement, the Worker’s Compensation Magistrate will have to evaluate that claim based on the condition of the employee’s knee after the corrective total knee replacement surgery. If the claimant maintained use of the leg after the surgery then claimant’s specific loss allegation would be denied.

The change to the specific loss standard of Section 361(2) of the Michigan Worker’s Compensation Disability Act is just one of many changes to the act incorporated into Public Act 266 of 2011. This bill was passed by both the Michigan House of Representatives and Senate, and was signed by Governor Snyder on December 19, 2011. The amendatory act will apply to injuries incurred on or after its effective date.

If you have any questions regarding this change to Michigan’s Worker’s Compensation Act or any of the other changes made under Public Act 266 of 2011 please do not hesitate to contact the Grzanka Grit McDondald law firm at 616-956-5559.