Conference Committee Substitute

CCS/HCS/SS#2/SCS/SB 1 - This act modifies the law relating to the Second Injury Fund and occupational disease within the workers' compensation system.

The act stipulates that "employee" shall not include any person performing services for board, lodging, aid, or sustenance received from any religious, charitable or relief organization.

The act affirmatively states that occupational diseases are exclusively covered under workers' compensation laws.

The act establishes psychological stress of paid peace officers of a police department as an occupational disease for the purposes of workers' compensation.

The act defines "occupational diseases due to toxic exposure" and creates an expanded benefit for occupational diseases due to toxic exposure other than Mesothelioma equal to 200% of the State's average weekly wage for 100 weeks to be paid by the employer. For mesothelioma cases, an additional amount of 300% of the state's average weekly wage for 212 weeks shall be paid by employers and employer pools who insure Mesothelioma liability. Employers who do not insure Mesothelioma liability shall not fall under the exclusive remedy provisions and a claim may be brought in a court of competent jurisdiction. These provisions expire on December 31, 2038.

Permanent total disability shall be awarded when the aforementioned toxic exposure awards are exhausted. Upon death, such payments shall be provided to the employee's spouse or children or to the employee's estate if no spouse or children exist.

The act requires medical providers to apply for reimbursement within 2 years from the date the fist notice of dispute of the medical charge was received by a health care provider if services are rendered before July 1, 2013, and within one year if they are rendered after that date.

Employers shall not have subrogation rights in toxic exposure cases when a third person is liable to the employee.

Currently, in workers' compensation cases an employee shall submit to reasonable medical examination at the request of the employer, the employer's insurer, the commission, the division, or an administrative law judge. This act requires the same treatment in claims against the Second Injury Fund at the request of the Attorney General, on behalf of the fund if the employer has not obtained a medical examination report.

Claims filed after the effective date of the act against the fund involving subsequent compensable injuries that are occupational diseases are to be compensated as other second injury fund claims are compensated.

Claims for permanent partial disability shall not be allowed against the Second Injury Fund after the effective date of the act. Claims for permanent total disability shall only be allowed going forward for instances when there exists a medically documented preexisting permanent disability caused by military duty or a preexisting permanent partial disability equaling a minimum of 50 weeks of compensation according to the medical standards that are used in determining compensation which is:

1. A direct result of active military duty;

2. A direct result of a compensable injury;

3. Not compensable but aggravates the subsequent injury; or

4. A preexisting permanent partial disability of an extremity, loss of eyesight in one eye, or loss of hearing in one ear and there is subsequent work-related injury to the opposite extremity, loss of eyesight or hearing in the other eye or ear.

There must then be a subsequent work-related compensable injury that, in combination, creates a permanent total disability.

Employees of sheltered workshops who sustain a work-related injury that, when combined with a preexisting disability, results in permanent total disability also have access to the Second Injury Fund.

Employers at the time of the last injury are only liable for the disability resulting from the subsequent injury.

Currently, the Second Injury Fund covers the fair, reasonable, and necessary expenses relating to the death and injury of employees of uninsured employers. The fund will no longer cover those costs going forward.

Currently, an actuarial study of the fund is conducted ever 3 years. This act requires a yearly study beginning in 2014.

Compensation shall not be payable from the Second Injury Fund when employees elect to pursue workers' compensation outside of the state.

Life payments paid out of the Second Injury Fund shall be suspended for all injured employees when the employee is able to obtain suitable gainful employment or be self-employed in view of the nature and severity of the injury.

The act establishes a priority for paying fund liabilities as follows:

• Expenses relating to legal defense of the fund.

• Permanent total disability awards in the order in which they are settled or finally adjudicated.

• Permanent partial disability awards in the order in which they are settled or finally adjudicated.

• Medical expenses incurred prior to July 1, 2012.

• Interest on unpaid awards.

The act creates the Missouri Mesothelioma Risk Management Fund to pay Mesothelioma claims brought against contributing members. Annual contributions shall be required by the board of its members.

This act allows the Director of Revenue to set the post award interest, with respect to the Second Injury Fund, to equal the adjusted prime rate charged by banks in certain instances or 5%, whichever is greater.

Workers' compensation insurers are allowed to insure their entire liability, including their employer liability under a policy of insurance or a self insurance plan.

The Director of the Division of Workers' Compensation is removed from the Administrative Law Judge Review Committee, which reduces the membership from 5 to 4 voting members. The Committee shall annually elect a chairperson, a position currently held by the Directory, for a term of one year. The act requires 3 or more no confidence votes under 2 successive performance audits for removal of an ALJ instead of 2 or more such votes under any audit.

The act institutes a funding mechanism to bolster the Second Injury Fund. The Director of the Division of Workers' Compensation shall impose a supplemental surcharge not to exceed 3% of net premiums from 2014 to 2021. The provision containing the authorization of additional surcharge expires on December 31, 2021.

Currently, tax overpayments are credited against the tax for the following year. Under the act, the taxpayer may elect to receive a refund in lieu of a credit.

The act also modifies provisions relating to workers' compensation insurers.

Workers' compensation insurers may develop an individual risk premium modification rating plan which prospectively modifies premiums based upon individual risk characteristics which are predictive of future loss. The plan shall be filed 30 days prior to use and may be subject to disapproval by the director. The rating plan shall establish objective standards for measuring variations in individual risks for hazards or expense and be actuarially justified. They shall not result in premiums which are excessive, inadequate, or unfairly discriminatory.

The act shall become effective January 1, 2014.

This act is similar to SB 430 (2011), SB 8 (2011), SB 807 (2012), SB 878 (2012), HCS/HB 1403 (2012), HB 1881 (2012), SCS/SB 572 (2012), SB 278 (2013), and SS#2/SCS/SB 1 (2013).


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