October 22, 2014

Auditor says second-injury fund is broke, urges legislature to fix it or eliminate it (AUDIO)

The state’s second injury fund is broke, and Auditor Tom Schweich says it’s time to either raise the rates employers pay — to the tune of six or seven percent — cut back on payments or the number of people who qualify, or eliminate the fund altogether.

Auditor Schweich says an additional surcharge on business tax — 7 percent total — would generate about $28 million to pay the fund’s unpaid obligations. Businesses currently pay 3 percent, which was a cap set in 2005.

The state’s second injury fund is broke, and Auditor Tom Schweich has three potential solutions.

The second injury fund awards benefits to workers who are injured a second time on the job, adding further incapacitation to previous injuries.

“The Attorney General called me and said ‘we’re having real problems,'” Schweich says. “The last audit our office did was five years ago … the problem has gone from bad to now a very grave situation.”

The second injury fund awards benefits to workers who are injured a second time on the job, adding further incapacitation to previous injuries.

He says the issue is both controversial and complex, and that’s why lawmakers have shied away from it in recent years.

“Now the courts are getting angry,” he says, “and something must be done.”

The fund was created after World War Two to encourage the employment of previously injured or disabled workers without exposing employers to liability for the previous injuries. Schweich says it’s possible the program no longer serves the purpose it was created for 70 years ago.

AUDIO: Jessica Machetta reports (1:28)