Michigan does not require workers comp until you have three employees.

Three or more employees at one time, counting part-time staff — or one or more employed 35 hours a week for 13 weeks or longer in the preceding year. (MCL 418.115).

Loss costs are filed by the Compensation Advisory Organization of Michigan (CAOM). Michigan is a competitive-rating state, so carriers set their own rates. Carriers then apply their own multiplier, which is why two quotes on identical payroll can differ widely — and why shopping matters more in some states than others.

You go to the Michigan Workers’ Compensation Placement Facility, administered by CAOM with policies issued through private servicing carriers. The submission needs Acord forms, current loss runs, a down payment and sometimes an inspection, and it generally will not proceed while any premium is still outstanding with another carrier. It is longer than a standard application, which is why most brokers decline the work rather than the risk — and why declined accounts often hear nothing at all instead of hearing no.

Because workers comp is priced off a state loss-cost filing, not a national rate. Most states take those filings from NCCI; California, New York, New Jersey, Pennsylvania, Michigan, Minnesota, Wisconsin, Massachusetts, North Carolina, Delaware and Indiana each run their own rating bureau. Same payroll, same class code, different starting number.

Every state maintains a residual market — an assigned risk plan or a state fund — that must take risks the voluntary market will not. The submissions are long and most brokers avoid them, which is why declined accounts often hear nothing rather than hearing no. We place them.

No. A mod is a three-year rolling calculation that drops the oldest year as it adds the newest, so a bad year ages out. What changes the trajectory is what happens between now and then — claim handling, return-to-work, and whether the reserves on open claims are still realistic. We have taken accounts out of the residual market this way.

Usually yes, in the sense that you will pay for them. If a sub cannot produce their own certificate at audit, most states let the carrier charge you as though they were your employee — which is why an uninsured sub is often the single largest line on an audit bill.

Workers comp premium is an estimate based on projected payroll, trued up after the policy year. If payroll ran higher than projected, or uninsured subs appeared, or employees were classified into cheaper codes than the work they actually did, the difference arrives as an audit bill.