Missouri's Second Injury Fund
Fri January 11, 2013
Confirmed: Missouri Fund For Disabled Workers Can't Pay The Bills
A report released Friday morning confirmed what many have already known: that Missouri's fund for disabled workers is broke.
Republican Auditor Tom Schweich found that Missouri's Second Injury Fund has $28 million in unpaid obligations, but only had $3 million at the end of 2012.
The fund covers workers' compensation claims for employees who have previous injuries or disabilities and then suffer a new job-related injury.
Schweich says the state is facing several lawsuits demanding immediate payment on claims that have been delayed.
“I mean, they’ve only got enough money to pay for $3.2 million in judgments," Schweich said. "If they don’t have the money in the fund they’d have to default and obviously everyone wants to avoid that.”
Auditors and financial analysts have warned for years that the fund was on a path toward insolvency after a Republican legislature capped the surcharge that funds the program at 3 percent.
“They can either wind it down, which is one option, and that’s been done in other states," Schweich said. "Or they can decide to keep it solvent and the way they can keep it solvent is by increasing the premium employer’s pay or they can reduce benefits as well.”
Republican Senator Pro Tem Tom Dempsey says the 3 percent cap will now have to change.
"It will in some way be addressed," Dempsey said. "And then as part of that, we need to restructure the fund so that - after we take care of the backlog - we can eliminate whatever the surcharge over 3 percent is and get back to 3 percent."
Dempsey says he is going urge his colleagues to pass that legislation during the current session.