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 agency on form WC-107, or its electronic equivalent, if the right of the injured or dependent to compensation is disputed. A copy of the form WC-107, notice of dispute, must be 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 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 that has accrued 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. (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) A medical bill becomes due and payable when the carrier or employer has received reasonable proof and the itemized 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 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, 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 agency in writing. A copy of the request must be forwarded to the carrier. In all cases, the agency 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 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.