October 25, 2014

House lawmakers consider fate of Second Injury Fund

Momentum is growing in the state House for the elimination of Missouri’s Second Injury Fund.

The Fund was created in 1943 to encourage employers to hire World War II veterans who were injured but could still work. It would later pay compensation in cases of workers returning to a job after an injury making claims when they are injured again.

Money in the fund comes from a surcharge on businesses’ workers’ compensation insurance that was capped at 3 percent in 2005. Since then lawmakers say it has become insolvent.

Attorney General Chris Koster stopped settling Second Injury Fund cases in 2009, leaving them all up to the courts, and quit paying new awards in 2011. There are now more than 28,000 pending cases.

State Auditor Tom Schweich released a report last week saying the Fund has only $3.2 million and owes $28.1 million in unpaid obligations.

House Speaker Tim Jones (R-Eureka) said in his opening day address that if the fund can not be saved without raising taxes on employers, the state should begin winding down the fund. In light of Schweich’s report, he now says, “I think the direction we will likely have to go is with a winding down of the Fund as 23 other states have done and take care of that backlog of claims.”

Koster said last year he also would prefer to eliminate the Fund.

Jones says he doesn’t yet know who will lead on the issue in his chamber, but Representative Chris Kelly (D-Columbia) is working on a bill to do away with the Fund.

As for whether lawmakers have any idea where money might come from to cover unpaid liabilities, House Budget Committee Chairman Rick Stream (R-Kirkwood) says, “Not yet.”