House Committee tackles Second Injury Fund fix passed earlier by Senate

After passing the Missouri Senate on a 32-2 vote, Senate Bill 1, legislation that will address two critical problems in Missouri’s workers’ compensation system, was presented to the Missouri House Committee on Workforce Development and Workplace Safety this week.

Sen. Rupp says the amended legislation, which is a result of compromises in the senate before passage, will keep Missourians from filing a claim against the fund unless they have a pre-existing military or work-related injury, then suffer a new work-related injury that disables them.

“We applaud Sen. Rupp’s leadership and quick action from the House to work on this critical issue,” said Daniel P. Mehan, Missouri Chamber president and CEO. “We know the House will have modifications to the bill, which may include a cap on the surcharge on the toxic exposure sub account. Language may also be included to allow the fund to defend itself against toxic exposure cases.”

By working side by side with lawmakers, the Missouri Chamber has remained in a position to impact the bill’s outcome on behalf of its members.

One of the primary reasons the fund is insolvent is because of the dramatic expansion of claims that have been run through the fund over the last two decades. SB 1 limits those claims. The legislation would eliminate permanent partial disabilities from the fund. SB 1 also blocks the current practice of stacking non-related claims in the fund. Another significant cost driver is the 9 percent interest rate that is accruing on unpaid claims. SB 1 reduces the interest rate to prime or 5 percent, whichever is more. In compromise to providing these reforms, lawmakers voted to temporarily increase the surcharge paid by employers until the fund reaches solvency.

The Missouri Senate also amended the legislation to include language that will bring the majority of occupational disease claims back under the exclusive remedy of workers’ compensation. The compromise crafted takes ten toxic diseases, such as mesothelioma, and provides an enhanced remedy. These conditions will be covered by a separate fund that all employers will support through a surcharge on workers’ compensation rates. Based on historical data the surcharge would be .27 percent.

Gov. Nixon has stated that he would only sign legislation if it included enhanced remedy for these types of occupational diseases.

“We are trying to find a legislative solution so that Missouri employers have some say in how this problem is addressed. Otherwise, the decision is going to be decided in court,” said Mehan. “That likely will mean a tax increase on employers without any of the reforms this legislation contains. It means that employers will continue to pay interest on outstanding claims at 9 percent interest.”

The Missouri Chamber continues to emphasize that the only way to get this legislation across the finish line is to agree to compromise. Refusal to compromise and finally pass legislation will cost employers millions of dollars in the long run.

“The lessons learned from previous legislative attempts in years past forced the compromise embodied in SB 1,” Mehan said. “Is it perfect? No. But it is much better than status quo where employers are sued in court on top of paying out work comp claims. We must return OD within the exclusive remedy section and reform the Second Injury Fund and SB 1 does just that. It is better for business than status quo.”

For more information on this issue, contact Brendan Cossette, at bcossette@mochamber.com, or by phone at 573-634-3511.

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