Second Injury Fund Reform
Issue Overview: Missouri's second injury fund is going broke. In the past 15 years, the fund has grown from $10.6 million to $72.7 million. Today, many of the states that, like Missouri, set up second injury funds in the 1940s have begun to either close their second injury funds and return responsibility to their regular workers' compensation system or limit coverage to veterans and people with permanent total disability claims.
Respect for Missouri's veterans and a desire to help disabled veterans get jobs were key reasons why the General Assembly created the Missouri second injury fund in 1943. Like most states that created such funds, Missouri's goals included limiting the liability of employers who wanted to hire disabled workers.
After the review by State Auditor Montee in April 2007 and the SIF study by PricewaterhouseCoopers in July 2007, we now know that Missouri's second injury fund is headed for insolvency in 2008 or 2009. We also know from the PricewaterhouseCoopers study that Missouri's long-term liability, if we closed the fund today, would exceed $1 billion.
Along with reforming the second injury fund, the state must also reverse the Schoelmehl Supreme Court decision. This decision says that a dependent is entitled to the disability payments after a worker has died. Sen. John Loudon has introduced SB 901 to correct this terrible decision.
NFIB Position: Small businesses pay 3 percent of their workers' compensation premiums to support the second injury fund. On the last NFIB Member Ballot, 90 percent of respondents said they did not support increasing the 3 percent to bail out the second injury fund. NFIB will continue to work to reform the second injury fund and reverse the Schoelmehl decision.
Issue Status: A press conference that included the governor, speaker of the House and president of the Senate took place the week of Feb. 18. The purpose of the press conference was to shine a light on the problems involving the fund. Legislation will be introduced this session, but, so far, the scope of the legislation hasn't been worked out. SB 901, Senator Loudon's legislation that addresses the Schoelmehl decision, has been passed by the Small Business Committee and been placed on the calendar for debate.
What to Do: Please contact your legislators and encourage them to reform the second injury fund. Also, ask your senator to support SB 901.
