Missouri Chamber outraged as Second Injury Fund fate falls to courts
Lawmakers left the fate of Missouri’s Second Injury Fund up to the courts as the final hours of the 2011 Legislative Session slipped by without resolution. Senate and House lawmakers met in conference throughout the week in an effort to iron out differences on workers’ compensation-related legislation that also was seen as a last opportunity to advance provisions to address the failing Second Injury Fund. However, unable to reach a compromise on Senate Bill 8, the legislation died, and so did chances of addressing the fund. The Missouri Chamber of Commerce and Industry warns that inaction leaves Missouri employers, employees and taxpayers in a precarious position. “Failure by the legislature to act has left Missouri’s Second Injury Fund in the hands of the courts,” said Daniel P. Mehan, Missouri Chamber president and CEO. “It is possible that a federal court judge will remove the 3-percent cap or keep the cap and order the additional revenues to be paid out of the state’s general revenue fund for finally adjudicated awards. Employers could be assessed a far greater surcharge than what was in any of the legislative proposals under review this year. No one knows how this will now pan out, and that puts Missouri employers, in particular, in a dangerous position. One thing is for sure, the problem isn’t going away, and ignoring it is only making it worse.” As of last month, individuals who have recently been awarded permanent total disability benefits are not receiving their checks, because there is no money to pay their award. Currently, there are more than 28,000 pending cases that have accumulated since the fund stopped settling cases in 2009. Seven hundred new cases are added to that number each month. A lawsuit against the Second Injury Fund has been filed by plaintiffs who claim that the Second Injury Fund will soon be insolvent and unable to provide the compensation due to them (Pettet al v. May). Additional lawsuits are likely to follow. “We think some business groups and lawmakers stuck their heads in the sand on this issue,” Mehan said. “It’s ludicrous, irresponsible and will cost employers far more than if we would have come together to resolve the issue. I would ask those blocking the fix, what they think the answer is – they don’t have one,” said Mehan. Currently funded by a 3-percent surcharge on workers’ compensation insurance premiums, the Second Injury Fund was created during World War II to make disabled veterans more employable by protecting employers from the expenses of re-injury on the job. However, in recent years, claims to the fund have expanded greatly – paying general claims against employers who do not carry workers’ compensation coverage and a broad range of non-work related pre-existing conditions. The Missouri Chamber sought to close the Second Injury Fund, with a temporary, capped funding mechanism to address 28,000 outstanding claims. This legislative fix would have put Missouri in line with approximately 30 other states that have eliminated their Second Injury Funds. In 1991 every state had some form of second injury fund. Today, that number is less than 20 states. The Missouri Chamber of Commerce and Industry will begin legislator and stakeholder discussions on Monday in hopes of finding a solution prior to July 1, when the Attorney General’s office plans to lay off the Second Injury Fund staff, leaving the fund undefended and employers on the hook for an ever-growing liability that is almost $1 billion. The Missouri Chamber of Commerce and Industry (www.mochamber.com) was founded in 1923 and is the largest business organization in Missouri, representing almost 3,000 employers, providing more than 425,000 jobs for Missourians.
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Posted by Rebecca Townsend on May 14, 2011. Filed under Press Releases.
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this is asinine. missouri legislators are playing three card monte by sitting on their hands while the liability for a fund that is earmarked to help its most vulnerable citizens adjust to life after a second injury goes broke. missouri won’t be satisfied until these unpaid stipends reach billions of dollars in liability against the state. is this their solution? prior to enacting legislation that require all adc recipients to be drug tested for compliance, it stands to reason missouri legislators would have found a way to address the second injury fund. i really hope these paid protectors of missouri’s economy come up with a solution before businesses turn tail and run for greener pastures, and taxpayers are somehow bilked.