Changes to workers' comp claims head to Nixon for approval

JEFFERSON CITY, Mo. -- Missouri lawmakers gave final approval Thursday to a measure that would double the fees charged to businesses in order to replenish an insolvent fund for disabled workers who suffer serious job-related injuries or illnesses.

If Gov. Jay Nixon signs the legislation, payments could start flowing next year to more than 1,200 injured workers whose benefits have been delayed because of the financial shortfall. The measure also could clear the way for the attorney general's office to start settling a backlog of more than 30,000 pending claims against the disability fund.

In addition to recapitalizing the Second Injury Fund, the legislation would change the way people suffering from job-related illnesses receive compensation by shifting most of those claims from the courts back to the administrative procedures of the workers' compensation system.

The House voted 135-23 Thursday to send the bill to the governor. The Senate passed it 33-1 a day earlier. Nixon has not announced whether he will sign the bill, though legislators involved in negotiating the bill have said he intends to do so.

The legislation represents a compromise among House and Senate members who previously had passed different versions of the bill and among the Missouri Association of Trial Attorneys and the Missouri Chamber Commerce and Industry, which represent the differing interests of injured workers and their employers. House Speaker Tim Jones declared it "one of the crowning successes of the legislative session" that ends Friday.

"We are taking on and trying to offer a solution to a problem that is tens of millions of dollars in the hole to businesses and taxpayers of the state that accumulates exponential interest every single day," said Jones, R-Eureka.

The Second Injury Fund is financed by businesses through a surcharge on their workers' compensation insurance premiums that was capped at 3 percent under the 2005 law, instead of being allowed to fluctuate based on the fund's annual expenses. Partly as a result of that cap, the fund now has a deficit.

Although it has a balance of $9.3 million, the fund owes more than $32 million in initial payments to people, not counting the interest that has been accruing, according the attorney general's office. Because of the cash-flow problems, the attorney general has delayed payments to 1,262 people awarded benefits since November 2011. There are an additional 30,630 claims pending against the fund.

The legislation would allow the state Division of Workers' Compensation to raise that surcharge to 6 percent, beginning in 2014 and continuing through 2021. It also would limit the fund's future coverage to only the most serious work-related disabilities and pare back the interest rates paid on judgments.

Attorney General Chris Koster, who has urged legislators to either revamp or abolish the fund, praised the Legislature for passing a bill.

"Missouri workers deserve a fiscally sound resolution to this tremendous problem," Koster said in a written statement.

Another aspect of the legislation seeks to reverse the way courts have interpreted a 2005 law that revised the workers' compensation system. That law made it harder for employees to prove an injury was work related and required its provisions to be strictly interpreted. As a result, judges have ruled that occupational diseases no longer are covered under the definition of "accident," and thus aren't required to be handled through Missouri's workers' compensation system. That has raised concerns among business groups that employers could be hit with costly lawsuits for work-related illnesses.

The state Chamber of Commerce has said Missouri is the only state in which the workers' compensation system is not the exclusive remedy for occupational diseases.

The legislation would again place most job-related illnesses under the umbrella of the workers' compensation system and provide an enhanced benefit for toxic-exposure illnesses. For cases involving an asbestos-related cancer called mesothelioma, employers could chose coverage through the workers' compensation system or a special risk pool -- both of which would pay an enhanced benefit of $500,000 -- or they could take their chances in court.

House Minority Leader Jake Hummel opposed the cap on mesothelioma benefits paid through the workers' compensation system. He has said previously that has grandfather died of asbestos poisoning.

"I don't believe that when someone is suffering, that someone is dying a slow painful death, (that they) should have a price tag put on their life," said Hummel, D-St. Louis. "I think that needs to be done in the courts, where juries can look at the human factor, where they can decide what pain and suffering these families have endured."