second injury fund Archives

Legislature overwhelmingly approves fix to workplace injury issues

May 17, 2013 By Mike Lear

The state legislature has passed a bill meant to cover two issues regarding workers hurt in the workplace.

Representative Todd Richardson (photo courtesy; Tim Bommel, Missouri House Communications)

The bill seeks to right the state’s Second Injury Fund, from which settlements are paid out to workers who have a disability and then sustain a work-related injury. Legislation passed and signed in 2005 capped at 3 percent the surcharge that supported the fund, paid by all businesses on their workers’ compensation insurance. Since then the fund had become insolvent by more than $20 million dollars, with more than 30,000 claims against it still pending.

The legislation proposes doubling that surcharge from 2014 to 2021, long enough to pay down pending and outstanding claims. It would also restrict the fund to cover only the most serious claims.

The House handler of the bill, Representative Todd Richardson (R-Poplar Bluff) says that should keep the Fund from becoming unbalanced again.

“By limiting the number of claims that go into the Second Injury Fund, everybody that looks at it believes that current surcharge will be sufficient to cover the ongoing liability.”

Richardson says if the bill is signed, the first step will be for the increased surcharge collections to begin after January 1, 2014. Then the backlog of claims will begin to be paid down.

“It’ll start with the permanent total disability benefit cases first. Those are the people that have the most extensive injury. They’ll pay that money out as it becomes available.”

The bill also moves coverage for occupational disease back into the state’s workers’ compensation system. A court interpretation of a 2005 law had led to those cases being handled in the courts.

Richardson says the House and Senate recognized the need to include an enhanced benefit for specific diseases, and one specific to mesothelioma, a cancer caused by exposure to asbestos.

“We’ve included what amounts to a $500,000 enhancement for mesothelioma cases, but we’ve also given employers the ability to choose to avail themselves of the workers’ comp system and that $500,000 remedy or continue to operate under the status quo and have those cases tried in civil court.”

Richardson says another mechanism guarantees a benefit to workers suffering diseases due to toxic exposure including berylliosis, coal worker’s pneumoconiosis, brochiolitis obliterans, silicosis, silicotuberculosis, manganism, acute myelogenous leukemia, and myelodysplastic syndrome.

House Minority Leader Jake Hummel (D-St. Louis) spoke against the legislation. Hummel has said on the House floor before that his grandfather died of poisoning due to exposure to asbestos.

“I don’t believe that when someone is suffering, that someone who is dying a slow, painful death should have a price tag put on their life. I think that needs to be done in the courts.”

House Speaker Tim Jones (R-Eureka) called the bill’s passage “historic,” and noted it passed out of the House with 135 votes.

“My entire caucus. I think the Governor’s going to sign that, for all indications, but if he does not for any reason I think we have an easy override on that.”

The proposal on Tuesday cleared the Senate 32-1.

Jones says Attorney General Chris Koster also sent him a text message on Thursday to thank him for the work he did on the Second Injury Fund issue. Koster has joined other politicians in saying the fund needed to be addressed.

House version of workers’ compensation, Second Injury Fund bill passed

May 3, 2013 By Mike Lear

The state House has passed its version of workers compensation reform and a Second Injury Fund fix, setting the stage for a conference with the Senate.

Representative Todd Richardson (photo courtesy; Tim Bommel, Missouri House Communications)

Both versions of the bill would have claims made by workers who incurred a disease because of their job fall under the state’s workers’ compensation system, to protect employers from lawsuits. They include a plan to create a fund to pay for part benefits to people who suffer from diseases related to exposure to toxins.

Representative Kevin Engler (R-Farmington) says the Senate proposal would have every employer in the state pay into that fund, an idea he opposed when he was in the Senate and still opposes.

“Whether you deal with chemicals or deal with anything else, every employer in the state will have a tax to take care of the fund that was caused by the people that brought chemicals in that caused these occupational hazards.”

The House proposal would support that fund with a surcharge to the workers’ compensation insurance premiums of only employers with 15 or more employees.

The state’s Second Injury Fund compensates workers with disabilities who sustain job-related injuries. It is supported by a surcharge on employers’ workers’ compensation insurance premiums that the state capped in 2005 at 3 percent. The fund is now insolvent, and the bill proposes raising that cap to 6 percent to replenish it.

The House sponsor of the bill, Representative Todd Richardson (R-Poplar Bluff) says that fund is more than $20 million out of balance.

“There are more than 800 claimants right now that aren’t getting paid and there are more than … 30,000 unresolved Second Injury Fund claims.”

Richardson says the House and Senate are in agreement on the portion of the bill dealing with the Second Injury Fund. He expects the Senate to request a conference to work out differences on the workers’ compensation and occupational disease language.

Koster asks legislature for a Second Injury Fund backup plan

February 18, 2013 By Mike Lear

The Attorney General is asking the legislature for a source of funding to fall back on if a fix to the Second Injury Fund doesn’t become law this years.

Missouri Attorney General Chris Koster calls the Second Injury Fund situation an “Illinois-level” issue.

Attorney General Chris Koster says a court ruling could come at any time against the Second Injury Fund that could force the state to pay more than $28.1 million in unpaid claims that it doesn’t have the money for.

Koster is asking the legislature for the money so that if that happens, attorneys can be paid to defend the state in cases that are still pending.

“My primary concern is that we don’t default … that we have people to show up in front of the work comp commissioners so that we don’t go into default on 30,000 cases.”

Koster says even if a fix passes the legislature, such as the one the Senate approved last week, it could take 2 to 3 years to pay down the money already owed to claimants and the courts could rule before then.

“I think that the courts, at some level, are waiting to see what the General Assembly does. If a credible plan comes out of the General Assembly I think the courts are more likely to try and let that plan take effect.”

Koster says the Second Injury Fund situation has the potential to leave Missouri in a budget deficit situation like that of Illinois.

Koster doesn’t offer an evaluation of the plan approved last week by the Senate. “We have to review the numbers before I can give you a final answer.”

House proposal would wind down insolvent Second Injury Fund

January 25, 2013 By Mike Lear

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 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.

House lawmakers consider fate of Second Injury Fund

January 18, 2013 By Mike Lear

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.”

Governor Nixon and House leaders discuss workplace issue legislation, budget

April 12, 2012 By Mike Lear

Governor Jay Nixon has met with leadership in the Missouri House of Representatives to discuss legislative priorities. Several Republicans have said it is the first time they can remember a Governor coming to a meeting of House leadership, and he says it was a productive get-together.

(from left to right) Majority Floor Leader Tim Jones, House Speaker Steven Tilley and Governor Jay Nixon

Republicans in both chambers have said they want to know what the Governor will sign in legislation dealing with workplace issues. Majority Floor Leader Tim Jones (R-Eureka) says Nixon spoke in general terms about those issues, but he feels he has an idea of what the Governor is thinking. “He believes there’s room to come up with a compromise on the second injury fund issue and the co-employee liability issue. I also, though, got the sense on the contrary point that the occupational disease issue to the Governor may be a road block.”

Jones says the House and Senate want all three issues, and a bill passed by the House on Wednesday includes all three.

He says the conversation with the Governor gives him new hope for it. “I think in order for him to sign that bill, that is a vehicle. The Senate now is going to have to do so some hard work in negotiating with the Governor’s office to find the specific language that this Governor will sign.”

House Speaker Steven Tilley (R-Perryville) adds, “My take from the conversation is that the Governor’s willing to work with us and we hope by the end of session we’ll have something that we can pass through both bodies and the Governor will sign.”

The two sides spent a lot of time discussing the budget, which has passed out of the House and is now being worked on by the Senate.

Jones says clearly, the two see differently how it was approached.

“You know the Governor has a different take on working to reduce quasi-entitlement programs. The blind issue came up, also on the issue of removing the “E’s” from different parts of the budget.”

Jones sums up the differences as philosophical, not partisan. “It’s more of a debate between the role and power of the legislature, whose duty it is to pass a budget, and the role and the power of the executive, who has a constitutional duty to then implement that budget.”

Other topics discussed were economic development and the recovery in Joplin from an EF-5 tornado last May. Jones says the meeting lasted until after the House had started its session for the day. Jones says he hopes to see Nixon back at future leadership sessions.

The Governor’s Office declined to speak about the meeting.