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Karen Buschmann, Vice President of Communications
Daniel Mehan, President / CEO

Missouri Senate crafts compromise to address Missouri’s Second Injury Fund and occupational diseases

 Facing unpaid liabilities of nearly $1 billion, Missouri’s Second Injury Fund is in a position from which it cannot recover without significant measures. The Missouri Senate voted to take such measures on Tuesday, unanimously perfecting Senate Bill 1.

“Time is money,” said Missouri Chamber President and CEO Daniel P. Mehan. “Inaction on this issue has already cost the system millions of dollars. Anyone who disagrees or is blocking this effort is costing employers millions of dollars and is keeping funds from people who have a right to have their claims paid. We applaud Sen. Rupp for sponsoring this legislation and moving the issue forward. We applaud leadership who has made this issue a priority and we applaud those senators that support it. There is no easy road to take to fix the problems facing the Second Injury Fund.”

One of the primary reasons the fund is insolvent is because of the dramatic expansion of claims that have been run through the fund over the last two decades. SB 1 limits those claims. The legislation would eliminate permanent partial disabilities from the fund. SB 1 also blocks the current practice of stacking non-related claims in the fund.

Another significant cost driver is the 9 percent interest rate that is accruing on unpaid claims. SB 1 reduces the interest rate to prime or 5 percent, whichever is more.

In compromise to providing these reforms, lawmakers have voted to temporarily increase the surcharge paid by employers until the fund reaches solvency.

The legislation also addresses another priority of the Missouri Chamber. SB 1 was amended to include a provision that would bring the vast majority of occupational diseases back under Missouri workers’ compensation system.

The compromise crafted takes ten toxic diseases, such as mesothelioma, and carves these out of the workers’ compensation system. These conditions will be covered by a separate fund that all employers will support through a .037 percent surcharge on workers’ compensation rates.

“From a business standpoint, this will provide protection for employers at a relatively low cost considering one toxic tort case can wipe out a small business,” said Mehan. “And it gives us a bill that the governor will sign.”

Gov. Nixon has stated that he would only sign legislation if it included enhanced remedy for these types of occupational diseases.

“It is a responsible compromise needed to get the majority of OD back under the system. Frankly, leaving occupational disease open ended was simply allowing the gravy train for trial attorneys to continue,” said Mehan.