HCS HB 522 -- WORKERS' COMPENSATION

SPONSOR:  Wilson, 130 (Fisher, 125)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Health Insurance by a vote of 9 to 4.

This substitute changes the laws regarding workers' compensation
and the Second Injury Fund.  In its main provisions, the
substitute:

(1)  Specifies that compensation from the fund will be suspended
if a claimant becomes incarcerated;

(2)  Specifies that eligibility to receive compensation from the
fund is contingent upon the employee being able to legally work
in the United States;

(3)  Prohibits claims for permanent partial disability from being
made against the fund beginning August 28, 2009;

(4)  Requires all claims for disability filed prior to August 28,
2009, to be accompanied by a determination of disability based on
objective medical findings certified by a physician;

(5)  Prohibits any compromise settlement paid by the fund from
exceeding $40,000 beginning August 28, 2009;

(6)  Specifies that the reasonableness of medical charges or fees
may be disputed based upon audits of medical bills and allows the
State Treasurer to present evidence with respect to the audit
findings on the medical charges;

(7)  Changes the occurrence of required actuarial studies of the
fund from once every three years to annually and requires the
first actuarial study to be completed prior to July 1, 2010;

(8)  Specifies that a claimant will be subject to an independent
medical evaluation, appropriate vocational testing or a
vocational assessment, and an evidentiary hearing attended by the
claimant before an administrative law judge who is required to
submit written findings if the claimant does not settle a claim
for compensation for a lump-sum settlement of $40,000 or less;

(9)  Specifies that, beginning August 28, 2009, claims are
compensable only if there was a medically documented pre-existing
disability resulting from active military duty or a pre-existing
compensable permanent partial disability which equals a minimum
of 50 weeks of compensation or if a major extremity injury only,
equals a minimum of 15% permanent partial disability and sustains
a subsequent work-related injury together with a compensable
injury which results in permanent total disability;

(10)  Specifies that in cases where permanent partial disability
is from a medically documented pre-existing disability as a
direct result of military duty or a compensable pre-existing
permanent partial disability together with a compensable injury
from a subsequent work-related injury that results in permanent
total disability, the employer will be liable only for the costs
associated with the injury incurred while working for him or her.
The fund will be responsible for any additional costs associated
with the permanent total disability;

(11)  Requires a person receiving permanent total disability
benefits to annually submit to the Division of Workers'
Compensation within the Department of Labor and Industrial
Relations proof of continued eligibility including the results of
a medical evaluation, appropriate vocational rehabilitation
assessment, and any pertinent information requested by the
division.  Costs associated with the vocational rehabilitation
assessment will be paid by the fund;

(12)  Specifies that the State Treasurer will be the custodian of
the fund;

(13)  Requires an employee in cases of recovery against the fund
for permanent total disability to name the State Treasurer as a
party and to submit to appropriate vocational testing, a
vocational rehabilitation assessment, and an independent medical
evaluation;

(14)  Subjects all awards for permanent total disability,
medical, or death benefits to an employee of an uninsured
employer affecting the fund to review and appeal;

(15)  Requires benefits payable to be based on the average weekly
wage calculated under Section 287.250, RSMo, as of the date of
the injury;

(16)  Specifies that the fund will pay fair, reasonable, and
necessary expenses to cure and relieve the effects of the injury
or of an injured worker employed by an uninsured employer.  In
the case of the death of an employee of an uninsured employer,
the fund will pay certain specified expenses.  Any moneys
received by the employee or the employee's dependents through
civil action or other action may be recovered for reimbursement
of the fund.  The Office of the Attorney General must bring suit
in the county circuit court against the uninsured employer for
reimbursement;

(17)  Allows the life time payment for permanent total disability
to be suspended if the worker is able to obtain suitable gainful
employment or be self-employed based on the nature and severity
of the injury;

(18)  Specifies that the division director may, in whole or in
part, suspend life time payment for permanent total disability if
the claimant becomes eligible to receive Social Security benefits
attributable to the employee's injury; however, the monthly sum
of the Social Security and life time payments must not be less
than the life time payments from the fund that the employee had
been receiving;

(19)  Requires a $200 fee for any second or subsequent claim
filed on behalf of a claimant against the fund;

(20)  Requires lump-sum settlements, exclusive of medical
expenses, to be compensated at a rate not to exceed $10,000 per
year, until the settlement amount is satisfied;

(21)  Specifies that an employee may not file a claim for
compensation in Missouri if he or she pursues a settlement in
another state with jurisdiction over the employee's injury,
accident, or occupational disease;

(22)  Prohibits a claimant from receiving compensation for
injuries for temporary or permanent disability, or a combination
thereof, which exceeds the weekly benefit amount the person would
receive for permanent total disability;

(23)  Limits attorney fees to up to 15% of any award, lump-sum
settlement, or annuity settlement against the fund;

(24)  Requires, upon the request of the division director, the
Department of Insurance, Financial Institutions and Professional
Registration to audit the workers' compensation insurance
policies of companies insured in multiple states for the purpose
of determining the amount of the insurance premium that is
applicable to Missouri workers;

(25)  Specifies that beginning January 1, 2010, the tax rate for
the funding of the Workers' Compensation Fund will be an annual
rate of not less than 0.5% or more than 2%;

(26)  Allows the Director of the Division of Workers'
Compensation to advance moneys from the Workers' Compensation
Fund to the Second Injury Fund and requires the advance to be
repaid no later than December 31 of the fifth year following the
advance.  The outstanding total of moneys advanced from the
Workers' Compensation Fund to the Second Injury Fund can't exceed
33 1/3% of the amount of the annual surcharge imposed in the year
of the advance;

(27)  Specifies that a surcharge payment to the fund is deemed
made the earlier of either the date postmarked by the United
States Post Office or the date certified by a commercial delivery
service when the customer deposited the envelope or parcel; and

(28)  Specifies that an insurer or self-insurer, upon application
to the Director of the Division of Workers' Compensation
regarding a surcharge overpayment, may receive a refund of the
amount of credit from the Director of the Department of Revenue
if no other state obligation is owed.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of Unknown
in FY 2010, FY 2011, and FY 2012.  Estimated Effect on Other
State Funds of a cost of Unknown greater than $986,809 in
FY 2010, an income of Unknown to a cost of Unknown greater than
$1,077,220 in FY 2011, and an income of Unknown to a cost of
Unknown greater than $1,080,938 in FY 2012.

PROPONENTS:  Supporters say that the bill addresses the financial
status of the Second Injury Fund by implementing provisions to
move the fund away from insolvency.  Although it is not a
permanent fix, it is a step in the right direction.  The fund is
supported by Missouri business dollars, and raising the employer
premium cap from 3% to 4% will not fix the problem but continue
to sink money into a financially distressed fund.  Employers are
not currently seeing a benefit from contributing to the fund, so
a premium increase is not the answer.  The fund should not be
viewed as a social program fund but rather a fund to compensate
injured workers.  Only about 20% of claims are rejected; thus,
too much money is going out to pay accepted claims and not enough
money is coming in.  Several claims are being paid out for
injuries or conditions that are not truly work place injuries.
Lowering the employee payout to $40,000 will help the insolvency
problem in the short term.

Testifying for the bill were Representatives Fisher (125) and
Funderburk; Associated Industries of Missouri; Missouri Chamber
of Commerce and Industry; National Federation of Independent
Business; Missouri Insurance Coalition; Associated Builders and
Contractors; Missouri Retailers Association; Missouri Grocers'
Association; Missouri Restaurant Association; and Missouri Motor
Carriers Association.

OPPONENTS:  Those who oppose the bill say that the proposed
changes in the bill will eventually terminate the fund, which
will end protections for Missouri employers.  The fund saves
employers money.  The fund has a revenue problem, not a benefits
problem, and the bill does not address the revenue problem.
Lowering the employee benefit payout is not good for the injured
employee.  The provisions of the bill are an attack on the rights
of injured employees to be fully compensated for their
work-related disabilities.

Testifying against the bill were the Missouri Association of
Trial Attorneys; Missouri AFL-CIO; Ron Sergent, AARP of Missouri;
Maurice Schulte; and United Steelworkers District 11.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:25 am