Missouri: Lawmakers seek to keep Second Injury Fund solvent

The Missouri House of Representatives is considering legislation aimed at keeping the Second Injury Fund from going insolvent. However, critics of the bill said the move will lead to higher workers' compensation premiums for employers.

Republicans said that expenditures for the fund have increased exponentially over the years while revenues have not kept pace. The fund compensates injured employees when a current work-related injury combines with a prior disability to create an increased combined disability. A pair of studies by the state auditor's office and PricewaterhouseCoopers LLP predicted that the fund would likely become insolvent in the near future.

Revenues for the Second Injury Fund are derived from a surcharge -- capped at 3 percent in 2005 -- that employers pay on their workers' comp coverage. H.B. 522, sponsored by Rep. Barney Fisher, R-Richards, would not lift the cap but would change eligibility requirements by prohibiting claims for most permanent partial disability injuries from being made against the Second Injury Fund. Those injuries would be shifted to the workers' comp system. If approved, the legislation is expected to increase workers' comp premiums which, in turn, would result in more revenue for the Second Injury Fund.

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The proposed legislation would also prohibit any compromise settlement paid by the Second Injury Fund from exceeding $40,000.

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March 11, 2010

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