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Columbia Missourian

GUEST COMMENTARY: Time is running out to fix Second Injury Fund

By Scott Wilson
May 13, 2013 | 2:26 p.m. CDT

A Republican legislator called the state of Missouri a “deadbeat” last week. Why? Because the state and its businesses promised to protect our state’s workers and their families, yet for the past seven years have failed to do so and now only have less than a week to act. The legislature’s inability to correct its past mistake and pass a compromise to fix the state’s bankrupt Second Injury Fund is an embarrassment to anyone who values hard work, responsibility, and our Constitution.

There is no denying that the state and Missouri businesses have been no better than deadbeat dads, behind on their child support, when it comes to the families of workers disabled by work-related injuries. Hundreds of severely injured Missourians who have had a judge find that they will never be able to work again now have unpaid judgments against the “Second Injury Fund,” an integral part of Missouri’s workers compensation system. Tens of thousands more have claims pending, but the state won’t pay them. Meanwhile, permanently disabled workers who have proven their cases in court are left with no way to collect on them, no job, and no way to pay their family’s bills. It should shock the conscience of us all.

“The Fund” is part of the way injured workers are compensated for serious work-related injuries which leave them permanently unable to work. Rather than make the last employer (and their worker’s compensation insurance carrier) have to pay for lifelong wage-loss benefits, the Fund allows for the risk of the most expensive claims to be spread out over the entire pool of the state’s employers. This saves businesses millions and millions of dollars and protects them from civil lawsuits which would cost them much, much more. Sadly, that safety net — for Missouri’s workers and businesses — is now bankrupt.

The Second Injury Fund was originally created after World War II to both encourage the hiring of veterans and to protect businesses from being liable for the full amount of a worker’s disability caused by a serious work injury. Before the Fund was created, employers were responsible for all of the disability, since the worker was able to work before the injury.

The Fund had worked very well for over 60 years — it was understood to be an obscure but necessary part of the work comp system and was a bargain for Missouri employers. Insurance companies admit they would have to charge at least four times that to provide the Fund’s benefits, which is why the Fund hasn’t been eliminated.

In 2005, the Missouri legislature and then-Governor Matt Blunt passed an overhaul of the workers compensation laws as a gift to the business lobby and allowed business groups to insert a provision they knew would bankrupt the Fund. It did. In each of the last seven legislative sessions, lawmakers and business groups have promised to fix it, and we are now down to the remaining days of the session with still no fix. All while disabled workers are denied the past-due payments they need to survive.

We need to keep in mind that the entire work comp system is meant to be an adequate substitute for the rights guaranteed all Missourians in our Constitution — including the right to have the court system open to them and the right to a remedy for injuries. The work comp law replaces the right to a jury trial, so an injured worker is stuck with the reduced work comp benefits. Now, even those limited benefits aren’t being paid.

However, the Supreme Court of Missouri has a case pending before it regarding the Fund’s insolvency and could decide that the 2005 bill was indeed unconstitutional, as it is fundamentally unfair to deny the right to the remedy guaranteed by the Constitution and then replace it with a substitute remedy which is now bankrupt. During arguments in that case, the Supreme Court was asked to find the 2005 law unconstitutional and order the state to replenish the Fund. If not, the courts could even allow previously settled cases to be re-opened against employers, since the Fund can’t pay their share.

Currently, the Fund owes more than $30 million in past due benefits, racks up millions more each year in additional judgments and interest, and is responsible for more than 30,000 pending claims. The Missouri Senate passed a compromise bill earlier in the legislative session which would go a long way to help fix the Fund, but the House didn’t accept it. The clock is ticking on the legislature to fix its past mistakes and to insist that business groups stop being deadbeats and fix the Second Injury Fund.

Scott Wilson is an attorney in Columbia practicing in the area of worker’s compensation. He is a member of the Board of Governors of the Missouri Association of Trial Attorneys.