
“Fixing the Schoemehl decision was a priority of the AIA and we’re pleased that the General Assembly and governor worked together to get it done,” said Steve Schneider, AIA vice president, Midwest Region. “We now hope, as we testified last year, that the state will abolish the Second Injury Fund, which has hundreds of millions in projected deficits.”
House Bill 1883 was signed by Gov. Blunt today. The key provision of the legislation overturns the state Supreme Court decision in Schoemehl v. Treasurer of the State of Missouri that extended workers’ compensation benefits to family members of a deceased worker. The new law now says that compensation for the permanent total disability of an injured employee terminates on the date of the injured employee's death.
“We welcome the governor enacting HB 1883, but now the task at hand is to further improve the state’s workers’ compensation insurance market by ending the SIF. Such a move would internalize all the costs to employers and their workers’ compensation insurers, rather than being ‘socialized’ throughout the marketplace via a catch-all pool. Doing so would not impact the amount of benefits that any injured worker will receive in any way,” said Schneider.
Second injury funds have been abolished in 19 states since the early 1990’s, most recently in Arkansas and New York. According to an actuarial study completed in 2007 for the Missouri Department of Labor and Industrial Relations, the Missouri SIF is projected to have a negative balance by 2009, excluding the impact of the Schoemehl decision.
“Unfortunately, repealing a SIF does not mean that its debt is erased. The SIF’s unfunded liability still must be financed, usually in continued existing assessments, until all of its outstanding claims are paid and the deficit is resolved. These assessments are imposed on all employers in Missouri and are tantamount to an additional tax on employment. The sooner the SIF is abolished and its liabilities begin running off, the sooner the assessments can begin to decline. That would be good news to all Missouri employers,” added Schneider.
The following states have repealed their Second Injury Funds:
STATE YEAR
Alabama 1992
Arkansas 2007
Colorado 1993
Connecticut 1995
District of Columbia 1998
Florida 1997
Georgia 2004
Kansas 1993
Kentucky 1996
Maine 1992
Minnesota 1995
Nebraska 1997
New Mexico 1996
New York 2007
Rhode Island 1998
South Dakota 1999
Utah 1994
Vermont 1999
West Virginia 2003
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