Missouri Senate Backs Bill to Bolster Second Injury Fund

By | May 17, 2013

More than a thousand disabled workers could finally begin receiving payments for their job-related injuries if the Missouri House gives final approval to legislation intended to replenish an insolvent state fund.

SB 1, which passed the Senate early on May 15, also would change the way people who suffer from work-related illnesses like carpal tunnel syndrome or asbestos-induced cancer receive compensation in the future. The two-part legislation is intended to reverse some of the consequences stemming from a 2005 state law that overhauled Missouri’s workers’ compensation system.

The proposal represents a compromise between House and Senate members who had previously approved different versions of the measure and between the Missouri Association of Trial Attorneys and the Missouri Chamber Commerce and Industry, which represent the differing interests of injured workers and their employers. But not all business groups were pleased. Associated Industries of Missouri warned “that the end result will still be very costly for employers.”

State Rep. Todd Richardson, who helped negotiate the bill, said he planned to press forward with a final vote that would send the measure to Gov. Jay Nixon.

“This is our best effort to try to balance the interests and put together a good bill that tries to give employers the certainty that they should have under the workers’ comp system but also to provide some reasonable protections to employees,” said Richardson, R-Poplar Bluff.

The legislation seeks to recapitalize the Second Injury Fund, which provides benefits to previously disabled employees who suffer additional work-related injuries. The fund is financed by businesses through a surcharge on their workers’ compensation insurance premiums that was capped under the 2005 law at 3 percent, instead of being allowed to fluctuate based on the fund’s annual expenses. Partly as a result of that cap, the fund now has a deficit.

Although it has a balance of $9.3 million, the Second Injury Fund owes more than $32 million in initial payments to people, not counting the interest that has been accruing, according the attorney general’s office. Because of the cash-flow problems, the attorney general has delayed payments to 1,262 people awarded benefits since November 2011. More than 30,000 others have claims pending that will need to be decided or settled.

The legislation sponsored by Sen. Scott Rupp, R-Wentzville, would allow state Division of Workers’ Compensation to raise that surcharge to 6 percent, beginning in 2014 and continuing through 2021. The increased revenues would allow the state to make payments on the backlog of claims, and future costs would be held down by new wording limiting the fund’s coverage to only the most serious work-related disabilities.

Phil Hess, a St. Louis attorney who handles workers’ compensation claims and is a past president of the trial lawyers association, said he’s concerned the 6 percent surcharge “will prove to be inadequate” and end too early. But he said it’s better than the status quo.

Another aspect of the legislation seeks to reverse the way courts have interpreted the 2005 workers’ compensation law. In general, the workers’ compensation system is meant to allow injury claims to be resolved through an administrative process instead of the courts – thus guaranteeing a benefit for injured workers and holding down legal costs for businesses. The 2005 law made it harder for employees to prove that an injury was work-related and required its provisions to be strictly interpreted.

As a result, judges have ruled that occupational diseases no longer are covered under the definition of “accident,” and thus aren’t required to be handled through Missouri’s workers’ compensation system. That has raised concerns among businesses groups that employers could get hit with costly lawsuits for work-related illnesses.

The legislation would again place most job-related illnesses under the umbrella of the workers’ compensation system and provide an enhanced benefit for toxic-exposure illnesses. It would let businesses choose how to handle potentially costly cases of an asbestos-related cancer called mesothelioma. Employers could cover it through the workers’ compensation system or a special risk pool – both of which would pay an enhanced benefit of $500,000 – or they could take their chances in court.

The Missouri Chamber of Commerce said employees could gain compensation either way.

“This is fair. If you have a claim, you’re going to get taken care of,” said Dan Mehan, the chamber’s president and CEO.

Rupp said he was told by Nixon’s office that he governor would sign the legislation. Nixon vetoed a bill last year that would have restored coverage of occupational diseases to the workers’ compensation system, because he said it didn’t provide an adequate remedy for people to recover money for serious diseases such as mesothelioma.

Rupp said this year’s bill is “good for businesses, injured employees and the taxpayers of the state.”

Topics Legislation Workers' Compensation Politics Missouri

Was this article valuable?

Here are more articles you may enjoy.