Missouri Lawmakers Leave Injured Workers Without Second Injury Fund Fix

On May 13, 2011 the Missouri Legislature concluded its annual session without addressing serious problems with Missouri’s Second Injury Fund.  Multiple bills were proposed during the session that would have offered either temporary or permanent solutions to the Second Injury Fund’s current financial shortfalls.  All the bills failed to make it to the House floor for final passage, and the session ended without a legislative solution.

The Second Injury Fund is now facing a financial crisis that could bankrupt future payments.  The Second Injury Fund receives its funding from a surcharge paid by employers on their Workers Compensation premiums.  In 2005 the Republican majority lowered the surcharge from seven to three percent, which failed to provide the fund with sufficient future revenues to pay existing liabilities plus the current claims, which are still clogging the Missouri Workers Compensation system.  Multiple audits by the Attorney General’s office, the Treasurer’s office, and other State agencies warned lawmakers that the surcharge had been set too low, and that the fund would eventually run out of money.  That reality occurred in the fall of 2010, when the Second Injury Fund ceased making voluntary payments and indicated that it would only pay awards.

Since then, there have been 55 new permanent total disability awards issued by the administrative law system.  The fund has refused to pay those, because it does not have enough funds to pay both the new claims as well as its old liabilities.  As a result, these permanent total disability claims remain unpaid and injured workers are going without benefits.

The Second Injury Fund was created in 1946 in the wake of World War II, when employers were fearful that disabled war veterans that became injured on the job would force them to cover disability payments.  The fund has evolved over the years as an excess, or shared risk, pool that provides employers with some shield when older or often-injured workers suffer a career-ending injury on the job.  The Second Injury Fund also provides important benefits for injured workers who work for an uninsured employer, or had a loss of a second job due to the work injury.  Currently, none of these benefits are being paid to Missouri workers.

Once an obscure area of Workers Compensation law, the Second Injury Fund was also the target of a political scandal in 1988, when then-candidate William Webster was indicted and convicted for engaging in a political kick-back scheme with Workers Compensation lawyers in the St. Louis area.  Five lawyers and five judges were eventually indicted and disbarred.  Since then, the Fund has provided important benefits and has been well managed by the Attorney General’s office, who acts on behalf of the Treasurer.  Its current woes are not due to mismanagement, but rather the political agenda of the Missouri business lobby and its Republican allies.  In the current session, lobbyists such as the Chamber of Commerce and the Associated Industries of Missouri worked relentlessly to kill any of the fixes proposed, and forwarded their own agenda of further limiting workers’ rights in Missouri.  Fortunately, their efforts also failed, as they were tied to the Second Injury Fund solutions.

Where do we go from here?  Multiple experts in the field have all predicted that employers will pay more in the long run through larger disability payments without the fund.  Unfortunately, the Republican majority and its business lobbyists are blind to the economic facts and are hell-bent to destroy the fund.

If you think you have a potential Second Injury Fund claim, or have not been paid a Second Injury Fund payment, contact the Meehan Law Firm, who is experienced in Workers’ Compensation settlements.