Supreme Court overturns workers' comp dependents ruling

Schoemehl, who suffered an on-the-job knee injury in May 2001, died one month after he began receiving benefits from the state. His wife, Annette, filed a claim, saying that as his dependent, she should be considered an employee under the state’s workers’ compensation law – and therefore was entitled to receive his disability benefits for the remainder of her life.

A state administrative law judge denied her claim, as did the state Labor and Industrial Relations Commission.

However, Schoemehl won an appeal to the Missouri Supreme Court, which found that the term “employee … when the employee is dead, also include(s) his dependents, and other persons to whom compensation may be payable.”

“Appellant was Schoemehl’s dependent at the time of his death,” the ruling states,” and falls within the statutory definition of an “employee” for purposes of workers’ compensation benefits.”

David Childers, an attorney with Whiteaker & Wilson PC, said the scope of the Schoemehl ruling is unclear, noting that there is a time limit regarding when appeals can be made after the state industrial commission terminates benefits.

“The question is whether the (survivors) have filed to have their benefits reinstated in a timely manner after the benefits are terminated upon the death of the employee,” said Childers, adding that 90 percent of the workers’ compensation cases he handles entail defending employers. “Until that question is answered, I don’t know how widespread this case is going to be.”

Attorney Les Boyle, who handles the claimants’ side of workers’ compensation cases, said he’s unfamiliar with the particulars of the Schoemehl case and is cautiously optimistic about the Supreme Court’s decision.

“As someone who represents claimants, I think it sounds great,” said Boyle, who operates Les Boyle LLC. “But it sounds to me like there’s a piece missing somewhere. It doesn’t make sense that beneficiaries of the deceased could continue to receive benefits forever.”

A moot point?

The issue of dependent benefit payments, however, could be rendered moot if Missouri Senate Bill No. 668 is passed by the state legislature.

The bill, which already has passed the Senate and is in committee in the state House of Representatives, would specifically exclude an injured worker’s dependents and estate from the definition of the word “employee,” from the workers’ compensation statute. It also would specifically state that permanent total disability benefits cease on the death of the employee.

Insolvency in 2008

Tammy Cavender, spokeswoman for the state Department of Labor and Industrial Relations, said that even if the legislation passes, it could not be applied to any of the 32,000 cases that already are awaiting review by the attorney general for possible payments from the Second Injury Fund, which pays permanent total disability benefits.

That puts emphasis on a more immediate hurdle facing the Second Injury Fund – the fund “will likely become insolvent during 2008,” according to an audit performed by the state auditor’s office in early April.

Part of the reason behind the expected insolvency is increased payouts from the fund – $68.4 million was paid out in 2006, up 106 percent from 2000 and $4.4 million more than the fund received in 2006.

The solvency issue doesn’t take into account the ramifications of the Schoemehl case. The audit says that, because the state Department of Labor and Industrial Relations does not collect information about dependents of benefit recipients, “the potential financial impact of the decision cannot be determined.”

Cavender pointed out that the department would need statutory or court-ordered authority to collect that information.

“We certainly do concur that the impact of the decision must be determined to figure out how much money is needed,” she said. “But we don’t currently have the authority to obtain that information.”