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Government, Politics & Issues

Missouri Chamber seeks to intervene in suit over Second Injury Fund

This article first appeared in the St. Louis Beacon, June 6, 2011 - The Missouri Chamber of Commerce and Industry has jumped into the court fight over the state's Second Injury Fund's moratorium on paying people awarded money under the fund, which is supposed to cover workplace injuries to people with pre-existing health problems.

The chamber, based in Jefferson City, announced today that it has "filed court documents to intervene and defend Missouri employers'' against a suit brought by people who have yet to receive their awarded payments.

The chamber is concerned that the workers filing suit might end up costing employers even more money, should judges rule in the workers' favor.

"The reason for our intervention is to give Missouri employers a voice in the outcome of this case. This case will directly impact every Missouri employer and potentially add significant costs to doing business in our state," said Missouri Chamber President Daniel P. Mehan, who is also chief executive. 

"The state of Missouri has strong representation from Attorney General Chris Koster, but prior to our filing, no one was representing the best interests of all Missouri employers," Mehan continued. "The Missouri Chamber of Commerce is proud to stand strong for Missouri businesses, whether before the state legislature or in the courts."

The Second Injury Fund's financial troubles go back several years, stemming from a cap that the Missouri General Assembly imposed in 2005 on the fund's source of revenue -- a percentage surchange that businesses pay into the fund, representing a portion of their workers' compensation insurance.

The cap used to float, depending on the amount needed for the fund. The 2005 action set it at 3 percent.

The fund is overseen by the attorney general's office and the financial shortfalls caused by the cap were already apparent before current Attorney General Chris Koster took office in January 2009. In late 2008, Koster already had gone public with his concerns and had been discussing them with legislators.

Gov. Jay Nixon, who had been attorney general for the 16 years prior, previously had warned the legislature that the cap could cause financial problems. However, his staff at the time had defended his management of the fund, particularly in the wake of Republican assertions -- resurrected today by the state GOP -- that the money problems were the result of his previous office's actions to increase the fund's maximum settlements to $60,000, from the previous $40,000.

During the last session, the Missouri Chamber tried to persuade the General Assembly to end the Second Injury Fund and shift its claims into the state's workers' compensation fund. A floating percentage cap would have been put in place on business payments, until the fund's existing claims are dealt with.

That measure failed to pass and Koster has begun withholding payments to any new Second Injury Fund recipients -- close to 60 so far. That number is soon expected to sharply increase, since 28,000 cases are pending.

Mehan noted that the courts also may assess damages against Missouri to remedy the unpaid payments.

Ironically, one of the initial reasons for creating the Second Injury Fund -- set up after World War II -- was to prevent costly lawsuits by setting up an orderly system for people with existing handicaps to claim damages for new workplace injuries,  and for the state and businesses to assess whether those claims were valid or frivolous.

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