General Assembly addresses Second Injury Fund insolvency and secures workers’ comp reforms after years of impasse

JEFFERSON CITY – Employers will be facing significantly less financial and legal liability as a result of the Missouri General Assembly’s work and final passage of Senate Bill 1 today.  The Missouri House gave final approval to the hard-won compromise and the legislation is now heading to the governor’s desk for signature.

“This is an important victory for Missouri employers,” said Dan Mehan, Missouri Chamber president and CEO.  “Working through the General Assembly, employers have taken these issues out of the hands of activist courts and the Trial Bar, and we are taking responsible measures to fix them.  Missouri employers and employees will be better off tomorrow than they are today as a result of this hard work.”

SB 1 contains provisions to address the Second Injury Fund and provide benefits for employers.

  • Most important, SB 1 limits the types of claims that can be run through the Second Injury Fund.  The fund had been greatly expanded over the last decade to cover claims that should not have been part of the fund, the main reason the fund became insolvent in the first place.  The bill removes all permanent partial disability from SIF, which is 80 percent of all SIF claims
  • The bill provides a long-term plan to pay off the $1 billion in liability that currently exists within the system.  Currently the Second Injury Fund is $32 million in the red, with more than 1,200 people with outstanding claims.  However, more than 30,000 claims are pending adjudication, saddling Missouri employers with great financial liability.
  • SB 1 also reduces the interest rate from 9 percent to 5 percent that employers are currently paying on outstanding claims.  This will save employers millions of dollars annually.

Years of impasse on this issue has resulted in claimants taking their case to court in order to secure benefits they have been awarded under the law.

“Letting the courts decide this issue likely would have resulted in large rate increases to fund a broken system,” said Dan Mehan, Missouri Chamber president and CEO.  “Employers fund the workers’ compensation system.  Employers are on the hook to pay the existing liability within Second Injury Fund.  It is only fair that employers have a say in how this problem is fixed.  We are grateful that this legislative body listened.”

In addition, the compromise brings all occupational diseases back under the workers’ compensation system.

  • Nine toxic exposure conditions will be eligible for enhanced remedy of up to $150,000 and guaranteed death benefits.
  • The toxic exposure condition of mesothelioma will be eligible for $500,000 in enhanced remedy.
  • An employer can opt to have coverage for toxic exposure under work comp policy, to pay for remedy out of a pool to be administered by the Department of Labor, or address any mesothelioma cases in circuit court.

“This option gives employers the choice on how to handle these risks,” said Mehan.  “Rather than continue to let occupational diseases be a target for trial attorneys, SB 1 provides protections for both employers and employees.  Currently, employees can take common ailments such as carpal tunnel syndrome and repetitive motion injuries to the courts, requiring months and thousands of dollars to resolve.”

The bill brings the system closer to where it had operated for 80 years.

“There is a reason no other state in the nation has occupational diseases outside of the worker’s compensation system,” Mehan said.  “It goes against the very reason workers’ compensation system was created.  We want workers to receive the care they need to be made whole, quickly and efficiently.  We want them to receive all that is coming to them, not have to pay 40 percent back to trial attorneys.  In exchange, employers want the protection from being brought into court for these types of injuries.”

The Missouri Chamber applauds leadership and the bill sponsor, Sen. Scott Rupp and Rep. Todd Richardson for their work on the issue.

The Missouri Chamber of Commerce and Industry (www.mochamber.com) was founded in 1923 and is the largest business association in Missouri, representing almost 3,000 employers providing more than 425,000 jobs for Missourians.

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