Missouri Gov. Jay Nixon has signed legislation raising charges on businesses to replenish an insolvent state fund that provides benefits to disabled workers
The new law will temporarily double the surcharge that businesses pay on their workers’ compensation insurance in order to finance a World War II-era program that pays benefits to disabled workers who suffer additional job-related injuries or illnesses.
Missouri’s Second Injury Fund has been running short of money for several years, causing Attorney General Chris Koster to delay payments to people awarded benefits and postpone settlements on pending claims.
As of this week, there are 1,381 people still waiting to receive benefits due to them as much as a year-and-a-half ago. An additional 30,991 claims remain to be resolved.
It could take a while, but many of those disabled workers can now have more confidence in getting compensated.
“We’ve solved the problem for all the injured workers out there who are owed money, and we’ve reformed the workers’ compensation system,” said Sen. Scott Rupp, R-Wentzville, who sponsored Senate Bill 1.
In addition to replenishing the disability fund, the newly signed law also places most job-related illnesses under the umbrella of the workers’ compensation system – relieving businesses of the prospect of costly lawsuits.
The Second Injury Fund is financed by a surcharge on workers’ compensation insurance premiums that was capped at 3 percent under a 2005 law, instead of being allowed to fluctuate based on the fund’s annual expenses. That cap contributed to the subsequent shortfall.
At the start of this week, the fund had a balance of $2.9 million but owed $32.8 million of initial payments to people, not counting interest.
The new law allows the business surcharge to rise to 6 percent starting in 2014 and continuing through 2021. It also limits the fund’s future coverage to only the most serious work-related disabilities and pares back the interest rates paid on judgments.
Koster said the increased revenues from the higher surcharge won’t start flowing until next April, meaning payments and settlements may still be delayed for some time.
But “this law allows the state to begin the process of providing relief to these injured workers,” Koster said in a written statement.
Nixon, who managed the program for 16 years in his prior role as attorney general, said the new law “will provide long-overdue certainty to businesses and security to injured workers.”
Another section of the new law seeks to undo the way courts interpreted a 2005 law that revised Missouri’s workers’ compensation system. That 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 raised concerns among businesses groups that employers could get hit with costly lawsuits for work-related illnesses.
The new law again places most job-related illnesses under the workers’ compensation system and provides an enhanced benefit for toxic-exposure illnesses. For cases involving an asbestos-related cancer called mesothelioma, employers can chose coverage through the workers’ compensation system or a special risk pool – both of which would pay an enhanced benefit of $500,000 – or they can take their chances in court.
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