Associated Industries of Missouri calls for action saving Missouri employers nearly $35 million
January 28, 2021 - The Executive Committee of Associated Industries of Missouri (AIM) voted unanimously today to endorse an extension of the Second Injury Fund supplemental surcharge at 2% for two years, rather than the current 3% surcharge. The surcharge applies to all workers compensation premiums, including nearly all self-insured plans.
"When we endorsed adding a supplemental surcharge, the Second Injury Fund was insolvent and had a backlog of claims that could not be paid," said Ray McCarty, president and CEO of Associated Industries of Missouri. "The backlog of claims has now been paid."
At the time the supplemental surcharge was put in place, AIM also called for an actuarial report on the status of the fund to be prepared annually. The most recent actuarial report shows a supplemental surcharge of 2% is sufficient to meet Second Injury Fund obligations for 2019, 2020, and 2021. Reducing the maximum supplemental surcharge to 2% from the current 3% will save every employer 1% on their workers compensation premiums - a total of nearly $35 million over the two year period.
"Associated Industries of Missouri supports funding the Second Injury Fund at adequate levels," said McCarty. "But recent court decisions and the actuarial report indicate a more limited Second Injury Fund surcharge for at least the next two years is appropriate," he said.
The surcharge is set to expire at the end of 2021 under current law. HB 384, filed by Rep. Rudy Veit, would extend the surcharge at its current maximum 3% level for five years. The bill will be heard Monday at noon.
"We would re-examine the situation after two years an make further recommendations at that time. We believe this is a responsible approach to funding the Second Injury Fund," said McCarty.