Missouri Auditor Tom Schweich released a report today that confirmed what the Missouri Chamber has been saying for years: Missouri’s Second Injury Fund is insolvent. Facing unpaid liabilities of more than $28 million, Schweich recommends legislative action, and the Missouri Chamber could not agree more.
“Time is money,” said Missouri Chamber President and CEO Daniel P. Mehan. “Inaction on this issue has already cost the system millions of dollars – we are accruing $1.25 million in debt each month in fact. Anyone who disagrees that something needs to be done or who is blocking action on finding a solution is costing employers millions of dollars and is keeping funds from people who have a right to have their claims paid.”
What does a year of inaction look like? Below is a detailed outline:
1/1/12 1/1/13 Increase of:
Unpaid PTD Awardees 170 282 112
Unpaid PTD Awards $13,128,233* $22,080,741 $8,952,475
Interest on PTD $110,133* $1,420,451 $1,310,318
Unpaid PPD Awardees 0 370 370
Unpaid PPD Awards $0 $2,481,956 $2,481,956
Interest on PPD $0 $28,562 $28,562
Unpaid Uninsured Awardees 5 13 8
Unpaid Uninsured Awards $134,240* $2,481,956 $2,347,716
Interest on Uninsured $7,042* $28,562 $21,520
TOTAL DUE $13,379,648 $28,134,585 $14,754,937
More than 600 injured workers are waiting for benefit payments from Missouri’s Second Injury Fund (SIF) that have been awarded to them under current law, with no promise of when their benefits will be paid. More than 29,000 workers are waiting to have their cases heard through SIF, with no idea when their cases will be resolved. The estimated liability of the fund for adjudicated awards is approximately $1 billion. At 3 percent, it would take approximately 30 years to pay current liabilities.
The Missouri Chamber has proposed a two front attack on the issue. First, reforms must be made to the system. In the last two decades, the Second Injury Fund has been dramatically expanded to cover injuries beyond its original intent. If these reforms are achieved, the Missouri Chamber would support a funding mechanism that would ensure future solvency of the fund. Or the Missouri Chamber would support eliminating the fund.
“Because of inaction by the Missouri Legislature to fix the problems with Missouri’s SIF over the years, Missouri is now in a position where reform alone will not resolve the outstanding liability without additional revenue,” said Mehan. “The Missouri Chamber has pleaded with lawmakers to address Missouri’s failing Second Injury Fund for several years. Unable to reach legislative resolution, the issue now lies in the hands of the courts. We’re seeing numerous lawsuits filed against the SIF, and more are expected.”