JEFFERSON CITY – With a 32-2 vote, lawmakers in the Missouri Senate sent a measure to the House of Representatives that would change the state’s law relating to the Second Injury Fund and provisions pertaining to occupational disease within the Workers’ Compensation system.  Senate Bill 1 is sponsored by Sen. Scott T. Rupp, R-Wentzville.

Established by the Missouri General Assembly in 1943 to benefit physically disabled citizens and individuals with previous work-related disabilities, the Second Injury Fund is a fund contributed to by all employers obtaining Workers’ Compensation insurance in the Show-Me State.  This fund provides benefits to employees who have sustained Workers’ Compensation injuries in certain instances.  Managed by the state treasurer, claims made against the fund are defended by the attorney general’s office.

Fund revenues are generated by an employer surcharge, which is based on each employer’s Workers’ Compensation insurance premium.  In 2005, the Legislature capped the surcharge rate at 3 percent, and the maximum rate of 3 percent has been set and imposed since that time.  However, Missouri’s economic climate did not support this cap, resulting in the fund’s financial position steadily declining over the years, leaving approximately $28.1 million in unpaid obligations to Missouri citizens who have received judgments in their SIF cases.  In addition, the Attorney General’s office estimates more than 30,000 cases with a potential liability exceeding $100 million are currently filed against the fund. 

Through SB 1, lawmakers approved a provision that would create a funding mechanism to bolster the Second Injury Fund when usual collections do not meet the fund’s demands.  If funds fall short, a supplemental surcharge not to exceed 1.5 percent for 2013 would be implemented, making the maximum rate 4.5 percent.  A surcharge not to exceed 3 percent would be collected for subsequent years if collections are inadequate.  These additional surcharges would expire in December 2020.

In addition, the act would establish a priority for paying fund liabilities, starting with expenses relating to legal defense of the fund; permanent, then partial, total disability awards in the order in which they are settled or finally settled by the court system; medical expenses incurred prior to July 1, 2012; and the interest on unpaid awards. 

Regarding occupational disease within the Worker’s Compensation system, SB 1 states that these diseases are exclusively covered under Worker’s Compensation laws.  The act defines “occupational diseases due to toxic exposure” and creates an expanded benefit for occupational diseases due to this type of exposure, including mesothelioma cases when the employer is an asbestos manufacture. 

Provisions of the bill establishing the type of claims to be paid out of the fund, limitations on settlement agreements, and funding mechanisms carry an emergency clause, enacting SB 1 into law upon the governor’s approval.

To follow this and other bills filed for the 2013 legislative session, visit www.senate.mo.gov.