Summary of the Perfected Version of the Bill

HB 1403 -- WORKERS’ COMPENSATION AND THE SECOND INJURY FUND

(Schatz)

COMMITTEE OF ORIGIN: Committee on Workforce Development and

Workplace Safety

This bill changes the laws regarding workers’ compensation and

the Second Injury Fund. In its main provisions, the bill:

(1) Specifies that every employer who is subject to the workers’

compensation provisions of Chapter 287, RSMo, must be liable to

furnish compensation for the personal injury or death of an

employee by occupational disease arising out of and in the course

of the employee’s employment and that an occupational disease is

exclusively covered under workers' compensation laws;

(2) Specifies that an employee will not be liable for a co-employee’s workplace injury or death for which compensation is

recoverable under the workers’ compensation laws, except that an

employee will not be released from liability for injury or death

if the employee engaged in an affirmative negligent act that

purposefully and dangerously caused or increased the risk of

injury;

(3) Suspends workers' compensation benefits to an incarcerated

individual and requires that an employee must be entitled to

legally work in the United States to receive benefits;

(4) Allows the Second Injury Fund to advance or reimburse

employees for expenses when an employee is required to submit to

medical treatment outside the area of the employee's principal

place of employment, but prohibits payment of transportation

expenses for a greater distance than 250 miles each way from the

place of treatment;

(5) Eliminates the current $40 per week benefit paid out of the

fund to an injured employee who is receiving physical

rehabilitation;

(6) Requires an employee to submit to appropriate vocational

testing and a vocational rehabilitation assessment scheduled by

the Attorney General on behalf of the fund if the employer has

not obtained a vocational rehabilitation assessment. An employee

must also submit to a reasonable medical examination at the

request of the Attorney General on behalf of the fund;

(7) Specifies that when a third person is liable to an employee

or a dependent of an employee when there is a finding that an

occupational disease was caused by toxic exposure as defined in

the bill and the employee or dependents were compensated under Chapter 287, the employer will not be subrogated to the rights of

the employee or the dependents against the third person when the

employer caused the occupational disease;

(8) Changes the interest rate paid on delinquent benefit

payments from 10% per year to a rate set by the Director of the

Department of Revenue equal to the adjusted prime rate charged by

banks;

(9) Eliminates a claim for permanent partial disability against

the fund after the effective date of the bill and specifies that

a claim for permanent total disability will only be allowed after

the effective date for instances when:

(a) There exists a medically documented preexisting permanent

disability caused by military duty or a preexisting permanent

partial disability;

(b) The preexisting disability equals a minimum of 50 weeks of

compensation according to the medical standards that are used in

determining the compensation; and

(c) Subsequent work-related injury occurs and, when combined

with the elements of the prior injury, results in permanent total

disability;

(10) Specifies that the employer at the time of the last work-related injury is only liable for the disability resulting from

that injury;

(11) Limits when the State Treasurer may enter into agreed

statements of fact and compromise settlements that would affect

the fund. A settlement is capped at $60,000 for a claim other

than a permanent total disability claim filed prior to the

effective date of the bill and capped at 200 times the employee's

permanent total disability rate as of the date of the injury for

a permanent total disability claim. The State Treasurer, with

the advice and consent of the Attorney General and with the

express authorization of a majority of the Second Injury Fund

Commission, may enter into a compromise settlement in any amount;

(12) Allows the State Treasurer, with the advice and consent of

the Attorney General and the express authorization of a majority

of the Second Injury Fund Commission, to enter into compromise

settlements with dependents of claimants arising from Missouri

Supreme Court’s decision in Schoemehl v. Treasurer of Missouri,

217 S.W.3d 900 (Mo. 2007);

(13) Eliminates a payment from the fund relating to the death

and injury of an employee of an uninsured employer after the effective date of the bill;

(14) Requires a yearly actuarial study of the fund with the

first one to be completed by July 1, 2013. Currently, the

actuarial study is required every three years;

(15) Specifies that no compensation will be payable from the

fund if an employee elects to pursue workers' compensation claims

under the laws of another state which has jurisdiction;

(16) Suspends the life payments paid out of the fund to an

injured employee when the employee is able to obtain suitable

gainful employment or to be self-employed in view of the nature

and severity of the injury and allows the Director of the

Division of Workers’ Compensation within the Department of Labor

and Industrial Relations to suspend the life payments paid out of

the fund to any injured employee when the employee becomes

eligible to receive Social Security benefits. The combined sum

of the amount of monthly payments from the fund and the monthly

Social Security benefits cannot be less than the monthly life

payments from the fund the employee has been receiving;

(17) Establishes a priority for paying any liabilities of the

fund as follows:

(a) Expenses relating to the legal defense of the fund;

(b) Permanent total disability awards in the order in which the

claims are settled or finally adjudicated;

(c) Permanent partial disability awards in the order in which

the claims are settled or finally adjudicated;

(d) Medical expenses incurred prior to July 1, 2011; and

(e) Interest on unpaid awards;

(18) Changes the provisions regarding the calculation of the

costs of administrating the workers’ compensation provisions.

Currently, a 2% tax is levied on insurance carriers when the

balance of the Workers' Compensation Fund estimated to be on hand

on December 31 is less than 110% of the previous year's expenses.

The bill requires that amount actually to be on hand on July 1 of

the year of the determination and the determination is to be made

on October 31;

(19) Repeals a provision allowing a loan to be made to the

Missouri Employers Mutual Insurance Company;

(20) Establishes a supplemental surcharge on employers not to exceed 1.5% to financially maintain the fund when the Director of

the Division of Workers' Compensation determines that usual

collections are inadequate. If funds continue to fall short, the

Second Injury Fund Commission must determine the shortfall to be

collected with an additional supplemental surcharge not to exceed

1.5%. These provisions expire December 31, 2019; and

(21) Establishes the Second Injury Fund Commission composed of

the Governor, Attorney General, President Pro Tem of the Senate,

and Speaker of the House of Representatives to review and

annually establish the surcharge amount.

The provisions which establish the type of claims to be paid out

of the fund, limitations on settlement agreements, and allowable

interest under workers’ compensation laws contain an emergency

clause.

FISCAL NOTE: Estimated Net Cost on General Revenue Fund of Less

than $848,870 in FY 2013, FY 2014, and FY 2015. Estimated Net

Effect on Other State Funds of a cost of Unknown to an income of

More than $100,000 in FY 2013, FY 2014, and FY 2015.

Copyright © Missouri House of Representatives