Compromise on Senate Second Injury Fund fix in the works
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Compromise on Senate Second Injury Fund fix in the works

Date: February 6, 2013
By: Marie French
State Capitol Bureau
Links: SB 1

JEFFERSON CITY -Missouri's Senate adjourned Thursday, Feb. 7, without finishing work on resolving problems with a bankrupt state fund that is supposed to cover the health-care costs of injured workers.

Senate work on the measure stalled from Democratic objections after the Republican sponsor offered a substitute that would restrict workers from suing employers for occupational diseases.

Legislators involved with the issue, however, indicated Wednesday night that progress was being made in working out a compromise.

“We’ve made a significant amount of progress on this issue tonight,” said bill sponsor Sen. Scott Rupp, R-St. Charles County.

Rupp said while no deal had yet been reached, the talks were far ahead of where he’d predicted they would be. Senate Republican Floor Leader Ron Richard said Rupp would be talking with the governor and the governor’s staff over the weekend and the Senate would take the bill up again next week.

The Second Injury Fund pays workers who become permanently partially or totally disabled because of a combination of previous injuries or disabilities with an injury on the job. The fund is insolvent, with more than $28 million in liabilities. That amount does not include an additional 30,000 pending cases working their way through the courts.

The fund is also delaying payments to some individuals. In December, 96 individuals awarded benefits had their payments withheld because of a lack of funds.

Businesses pay for the fund with a surcharge on workers’ compensation insurance premiums. In 2005, the legislature capped the surcharge at 3 percent, which has been cited as the source for the fund's current financial trouble.

Rupp's bill would limit eligibility for the fund, increase the surcharge paid by businesses and lower interest rates paid by the fund to workers with claims.

Rupp said he was committed to including occupational disease language in the bill, which was the source of some debate Wednesday. His bill would cover occupational diseases fully under workers’ compensation laws. This would mean employees could not sue employers for damages through the court system for diseases caused by workplace conditions.

“These two issues, I married them together and they will stay married,” Rupp said. “It’s an integral part to workers’ compensation.”

Sen. Gina Walsh, D-St. Louis County, said she did not think the occupational disease provision should be included in a bill intended to fix the Second Injury Fund.

“We shouldn’t muddy the waters with other issues such as occupational diseases,” Walsh said. “I just don’t think it belongs here.”

Walsh proposed an amendment to exclude occupational disease caused by asbestos exposure, such as mesothelioma, from being covered by workers’ compensation laws.

The Senate took no action on the amendment, as Democratic senators filibustered the bill while negotiations took place behind the scenes.

“I’m happy to hear that those conversations are continuing this evening,” said Sen. Scott Sifton, D-St. Louis County. “If we can reach an agreed resolution, that’s always better.”

Rupp’s bill would give the director of the Division of Workers' Compensation, which is a part of the Department of Labor and Industrial Relations, the authority to raise the surcharge up to 6 percent – double the current 3 percent cap – from 2014 through 2020.

The legislation encountered opposition from Sen. Maria Chappelle-Nadal, D-St. Louis County, and other Democrats on Monday because of the change to eligibility. Under the proposed bill, the Second Injury Fund would no longer cover individuals with permanent partial disabilities. Workers with permanent total disabilities would only be covered if the first injury was from military service or work-related.

“The savings, truly, is going to be on the backs of those people who have preexisting liabilities,” Chappelle-Nadal said Monday. “I say that’s an injustice.”

Rupp said resolving the problem now was urgent because of a case before the state Supreme Court, which could force the state to assume liability or dramatically raise the amount paid by businesses.

“We kind of have a ticking time bomb,” Rupp said Monday. “I believe that the courts are going to put a gun to our head and say this is how you’re going to solve it.”