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Opinion: State injury fund solution rests in hands of courts

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In the May 23 Opinion piece, “Tax increase will not fix the Second Injury fund,” Ray McCarty of Associated Industries of Missouri left out some important facts. This omission, and his organization’s push to kill legislation that would have brought responsible reforms to Missouri’s workers’ compensation system in the recently concluded legislative session, will cost employers greatly in upcoming years.

The proposal to fix Missouri’s failing Second Injury Fund was not a tax increase. It moved the same employer liability that exists under the system today to the workers’ compensation system, where claims can be more efficiently addressed and employers would be more effectively defended.

Solving the “true problem of rising costs” of the fund is more than ending the fund. The Missouri Supreme Court, in Federal Mutual Insurance Co. v. Carpenter (1963), has held that “in the absence of an apportionment statute or Second Injury Fund legislation, the employer is liable for the entire disability resulting from a compensable injury.”

Currently, there is no interest in the Missouri General Assembly to do away with all employer liability covered by the fund. Further, assuming the General Assembly would pass such a piece of legislation, there is no doubt that Gov. Jay Nixon would quickly issue a veto. Either McCarty does not realize the existing case law and political landscape of Missouri or he doesn’t care. His approach is like saying that you should fix a building’s electrical wiring issues that caused a fire while your entire business is burning to the ground.

McCarty claims that the Second Injury Fund system “was never intended to cover injuries outside of the workplace.” Although a catchy sound bite, the law does not support this claim. Section 287.220.1 of the Missouri Revised Statutes states that “If any employee who has a pre-existing permanent partial disability whether from compensable injury or otherwise … receives a subsequent compensable injury resulting in additional permanent partial disability … shall be paid out of a special fund known as the Second Injury Fund.”

We disagree with the policy, but the policy remains in law until alternative legislation is passed. Unfortunately, that was blocked by McCarty’s organization. Here are the facts:
  • Employers are responsible for the financial liability of the fund under current law.
  • The Second Injury Fund is insolvent and is not fulfilling its obligations under current law.
  • More than 28,000 fund cases are awaiting adjudication and that number is growing at a rate of 700 cases per month.
  • Because of Missouri’s inability to settle cases, awards by way of judgment have increased by more than 40 percent, adding to employers’ liability.
  • Inaction by the legislature on this issue has put resolution to the problem in the hands of the courts.
No option to fix the fund problem will come without a cost to Missouri employers. The Missouri Chamber chose to control the process, not abdicate that opportunity. However, irresponsible ignorance clouded the intent and leaves this problem unresolved. It is unfortunate for all Missouri employers who will continue to pay the cost of an ineffective system that progressive efforts were blocked.

Daniel P. Mehan is president and CEO of Jefferson City-based Missouri Chamber of Commerce and Industry, which represents nearly 3,000 employers that employ 425,000 Missourians. He can be reached at[[In-content Ad]]


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