October 21, 2014

House proposal would wind down insolvent Second Injury Fund

A plan has been introduced in the state House to take care of the problems with the Missouri Second Injury Fund.

The bill filed by Elijah Haahr to deal with the Second Injury Fund is his first.  (Photo courtesy; Missouri House Communications)

The bill filed by Elijah Haahr to deal with the Second Injury Fund is his first. (Photo courtesy; Missouri House Communications)

The bill filed by Representative Elijah Haahr (R-Springfield) would raise the cap on the surcharge on workers’ compensation insurance paid by businesses from 3 to 6 percent for 6 years and use the increased revenue to clear a backlog of nearly 30,000 pending claims and $28.1 million in unpaid liabilities.

Haahr says it could be 2017 before the final cases against the fund are settled.  Once all liabilities are paid off the surcharge would be drawn down and eliminated.

“Some of these claims will be paid out over many, many years … this will not all be finished in a 6 year period … what it does is it says the last date of injury that would fall under the Second Injury Fund would be injuries before July 1, 2013. The last claims against the Second Injury Fund would be July 1, 2015.”

See the legislation, HB 321.

The plan would also allow businesses to apply for a tax credit of up to 1.5 percent while the cap on the surcharge is raised.

“Basically to ensure that the full brunt of this does not fall immediately on the business community because especially small businesses, this might be a tough time for them to do this.”

The bill is backed by a bipartisan group of 30 cosponsors.

Fixing the Second Injury Fund is a priority for Republican leadership in the House.