HB 5187 — Summary (amends MCL 418.833)
Status & procedural history
- Introduced: filed March 14, 2025; reprinted/electronically reproduced October 30, 2025.
- Current referral: Committee on Economic Competitiveness (introduced Oct. 30, 2025 by Rep. Kelly Breen; many cosponsors).
- Related/companion bill: SB 2477.
- Purpose: to limit and clarify when and how employers or carriers may recoup overpayments of workers’ compensation benefits.
Purpose and intent
- Protect injured workers from wide retroactive recoupments of benefits and clarify the conditions under which employers or carriers may recover overpayments. The bill narrows the look‑back period for recoupment, places proof requirements on employers/carriers when benefits were voluntarily paid, caps recovery rates in certain circumstances, and allows administrative waiver where recoupment would cause undue harm.
Key provisions (section-by-section summary of substantive changes)
1. One-year look‑back limit for awards and recoupment
- Reinforces that agency-ordered compensation generally cannot be made for periods more than 1 year before an application for further compensation.
- Limits recoupment: an employer/carrier may not seek recovery for overpayments for any period more than 1 year before the date the employer/carrier takes action (i.e., files to recoup).
Burden on employer/carrier when benefits were voluntarily paid
- If employer/carrier voluntarily paid benefits (including under a “voluntary pay agreement”), the employee cannot be ordered to reimburse an overpayment unless the employer/carrier establishes one or more of:
a. The employee concealed post‑injury earnings;
b. The overpayment resulted from a mathematical, technological, or clerical error; or
c. The overpayment resulted from a coordination error as described in MCL 418.354(9).
Cap on recovery for clerical/technical errors
- When overpayment is due to a mathematical, technological, or clerical error, recoupment may be achieved by reducing the worker’s weekly benefit amount but not by more than 50%.
Protections where employer/carrier changes position
- A worker’s compensation magistrate may not order reimbursement if the employer/carrier unreasonably changed its position about whether the employee has a work‑related condition or disability.
Waiver authority
- A magistrate may waive recoupment if the employee proves that recoupment would cause undue harm or would not serve the purposes of the Workers’ Disability Compensation Act.
Definitions
- “Carrier” explicitly includes specified state funds (PEGSISF, the Christopher R. Slezak first responder presumed coverage fund) and the self‑insurers’ security fund.
- “Voluntary pay agreement” is defined as a written agreement for voluntary payment of benefits.
Who is affected
- Injured workers: receive greater protection from retroactive recoveries and large lump‑sum recoupments; may be shielded entirely in many voluntary‑pay situations.
- Employers, insurers, and state funds: face limits on how far back they may recoup and on the rate of weekly reductions for recovery; bear burden of proof when benefits were voluntarily paid.
- Worker’s compensation magistrates and claims administrators: gain explicit discretion to waive recoupment for undue harm and must apply the one‑year look‑back and cap rules.
Potential impacts and considerations
- Reduces employer/carrier ability to recover long‑past overpayments and limits rapid recovery via large paycheck deductions, which could increase their net costs or encourage tighter prepayment verification.
- May encourage clearer documentation of voluntary pay agreements and more conservative reserve/claims practices by payors.
- Provides judicial discretion to protect workers from hardship due to recoupment.
- Administrative interpretation will matter (e.g., what constitutes “unreasonable” change of position; how magistrates apply “undue harm”).
Statutory amendment
- Amends section 833 of the Worker’s Disability Compensation Act of 1969 (MCL 418.833).
