The Missouri Supreme Court recently heard arguments that may well determine the future of a little-known Missouri governmental program known as the Second Injury Fund.
The Fund was created after World War Two as a program to encourage the employment of partially-disabled workers. Instead of an employer being held fully liable to its injured worker whose disability was only partly caused by a work comp injury, but was increased by the combined effects of the on-the-job injury with pre-existing disabilities, the State (through a surtax on employers’ workers’ compensation insurance premiums) spread the risk of such claims by paying whatever disability benefits were due to the increased combined effects.
Political and other shenanigans on both sides of the workers’ compensation debate made The Fund an easy target in gubernatorial campaigns in the 1990s, and resulted in several participants pleading guilty to various criminal charges. After that, The Fund became an object of disfavor in the eyes of various business interests, who found a way to curtail the source of its funding, to the point where The Fund could no longer meet its financial obligations.
In 2014, after years of little or no payments of its obligations by The Fund due to intentional underfunding, the Missouri legislature passed legislation designed to both facilitate the resolution of claims pending against The Fund and to sharply limit future claims. In return for increased funding to pay claims already pending against The Fund, the legislature sought to strictly limit the type of claims that could be made against The Fund for permanent total disability, and to totally eliminate claims for permanent partial disability.
Last year, an appellate court ruled that the legislature had partially failed in its attempt to limit permanent total disability claims against The Fund due to defective drafting of the enacting legislation. Now, the attempt to eliminate permanent partial disability claims faces a similar challenge.
The Missouri Supreme Court heard arguments recently challenging both the language of the enacting statute in regard to permanent partial disability claims and its constitutionality. Although lower courts had declined to rule against the attempt to limit The Fund’s exposure, the outcome of the appeal is by no means certain.
Upholding the legislature’s language will accomplish its stated goal of significantly reducing the role of The Fund, both as an insurance risk management tool, and as an incentive for businesses to hire partly disabled but otherwise employable workers. While a reversal of the previous rulings would return The Fund closer to its previous status, it would also be expected to spur further legislative attempts to do away with The Fund.
For more information about the current appeal, go to: https://www.missourinet.com/2018/10/24/missouri-high-court-looking-at-constitutionality-of-2014-chance-to-workmans-compensation-law/