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Governor signs bill to salvage Second Injury Fund

Associated Industries of Missouri applauds Governor Nixon for signing Senate Bill 1 – legislation that will reform and provide additional funding for the Second Injury Fund and clarify occupational diseases are covered under the exclusive remedy provisions of Missouri’s Workers’ Compensation system. However, AIM is concerned that new enhanced payments for certain diseases contained in the bill threaten the basic foundation of workers’ compensation in Missouri.

The Second Injury Fund part of the bill contains language agreed upon by Associated Industries of Missouri (AIM) and a broad coalition of employer representative groups.  The surcharge that employers pay to support the Fund will temporarily increase in exchange for some much-needed reforms. For example, workers used to be allowed to “stack” work injuries and non-work injuries in a way that allows a worker to be more than 100% disabled and still able to work. This practice will no longer be allowed under the new law.

The bill also lowers the interest rate on outstanding claims – interest that currently accrues at an unreasonably high rate of 9%. The new interest rate will be the greater of 5% or a market-based interest rate equal to the rate charged on tax delinquencies. The surcharge paid by employers will double for a period of seven years to help pay outstanding claims, then return to its current level in 2021.

“These are reforms that Associated Industries of Missouri has fought for over many years,” said Ray McCarty, president/CEO of AIM. “This bill will fix a broken down system and help sustain the Second Injury Fund into the future.”

The bill also clarifies occupational diseases are covered under the exclusive remedy provisions of the Missouri Workers’ Compensation Law. Some courts have opined that occupational diseases were inadvertently omitted from a 2005 revision to the workers’ compensation law. Other recent decisions have indicated that the diseases remain covered under the law. Senate Bill 1 will clarify the exclusive remedy provisions of the Workers’ Compensation law apply to occupational diseases. The new law also requires higher guaranteed payments to workers contracting ten diseases that result from exposure to toxic materials or chemicals in the workplace.

“While we are glad that there is now language in law that clarifies occupational diseases are covered by the Missouri Workers’ Compensation Law, we are concerned about the new enhanced remedies,” said McCarty. “We feel these new guaranteed payments for special diseases set a bad precedent for future carve-outs in workers’ compensation cases.”

“The basic premise of workers’ compensation is threatened by this special treatment.  Workers’ compensation is designed to allow workers to receive quick medical treatment and protect employers from costly lawsuits. As state law evolves to exclude some diseases from this ‘no fault’ system, AIM is concerned what diseases or types of accidents will be next, and if and when this dangerous trend will stop,” said McCarty.

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