Changes to Second Injury Fund and Workers’ Compensation

There is one extremely important piece of legislation that is on the governor’s desk which would offer a solution to the state’s bankrupt “Second Injury Fund” which is responsible for compensating disabled workers who are re-injured on the job combined with a prior disability to create an increased combined disability.  This fund was originally created to provide an opportunity for disabled veterans to have gainful employment.  When they suffered a subsequent work-related disability, this program was there to assist them.

Many other changes to those provisions have occurred over the years which have helped to create the current $32 million in payments due to more than 1,200 disabled Missourians.  While it is worrisome enough that the fund can’t meet its obligations to workers already in the system, those numbers don’t include the more than 30,000 new claims that have been put on hold.  When you add up everything, the picture is incredibly bleak for the Second Injury Fund and the disabled workers it is meant to serve.

The legislature has attempted to pass legislation in each of the last several years.  Unfortunately, the proposals to address problems with this fund had not made it through the legislative process for one reason or another – until now.  Senate Bill 1 which we approved this year would temporarily increase the surcharge that businesses pay on their workers’ compensation insurance premiums to generate the funds necessary to settle the thousands of claims that are currently pending.  

SB 1 will also narrow the list of injuries that qualify, in the future, for compensation from the Second Injury Fund and will provide a means of raising money for the fund.  In order to qualify for future payments from the Second Injury Fund, a worker must have a documented permanent disability that resulted directly from active military duty or from a compensable work-related injury.  Or, the pre-existing condition may be the permanent partial disability of an extremity (such as an arm or leg), eye, or ear or must lose use of the opposite limb, eye, or ear.  

Back injuries acquired over long periods of time will no longer count on the Second Injury Fund, although they can still be covered by the Workers’ Compensation Program.  This change is in the best interest of the workers; because with all the many accumulated injuries covered now, people aren’t receiving the money they were promised.

Specifically, the bill would allow the surcharge to be increased from three percent to six percent for the years 2014 through 2021.  The additional funds raised by this increase would allow the fund to pay off the outstanding claims.  The bill also would keep claims from spiraling out of control in the future by providing coverage through the fund only to the most serious work-related disabilities.  

Another important fix contained in the bill would reverse court rulings that have removed work-related illnesses from the workers’ compensation system.  Those rulings directly contradict a 2005 law that reformed our workers’ compensation system, which is meant to provide the guaranteed benefits to injured or critically ill employees while holding down costs for employers.  

The end result is that work-related illnesses are now handled by the courts where employers are vulnerable to costly lawsuits.  The bill we approved would move these illnesses back into the workers’ compensation system where they were meant to be.  It is a move that will give employees who develop an illness on the job a guaranteed benefit while also ensuring that Missouri’s employers can afford to stay in business.

Under the new law, the Second Injury Fund will not cover employees of uninsured workplaces. This should create an incentive for all businesses to contribute to the Fund, creating a larger pool of money for those who end up needing it.  In order to dig this fund out of the pit dug over the past several years, a surcharge will be levied of no more than 3 percent of net profits on businesses.  Business owners seemed to agree that 3 percent is a small sacrifice to fix a problem that has been crippling industry.

It is important to understand this is not a perfect bill.  As one of my colleagues said during House floor discussion, each member of the legislature probably sees something in the bill they don’t like.  But the 2013 Second Injury Fund fix is a common-sense solution that has been desperately needed for years.  It also gives employers and employees some certainty when dealing with work-related illnesses.  All in all, I believe it represents a good compromise and a step in the right direction for both workers and business owners here in our state.

Flag Day is a day when all Americans celebrate our flag by showing respect for it — its makers and its designers.  One of the main symbols of the United States of America, it was authorized by the U.S. Congress on Saturday, June 14, 1777.  That original flag had 13 stripes–seven red and six white.  They represent the original 13 colonies.  There were also 13 white stars in a blue field representing a new constellation.

Since 1777, there have been different versions of the official flag; however, the red and white stripes with blue constellation have remained the same.  Each state in the union is represented by a five- point star and the number of stars has changed as states joined the union adding up to the current 50 states which belong to our United States of America.

Also, Sunday the 16th is the special day for dads!  I want to thank all the fathers out there — I will be sure to tell my pop “thank you” for his love and support through the years.