Is the Second Injury Fund in Danger?

Is the Second Injury Fund in Danger?

We’ve known for some time that the Missouri Second Injury Fund is in danger of running out. Alarm bells have been sounding since the passage of a 2005 cap on the employer surcharge that funds this type of compensation. Though businesses have countered that the issue is one of overpayment, a state auditor’s report in 2007 found that revenues could begin to fall short as early as 2008. The fund has finally begun to reach its limits in 2011. The Attorney General’s office has just circulated a memo stating that available funds have dropped to $1.34 million from a 2006 balance of $30 million.

The Purpose of the Fund

The second injury fund was originally created to benefit both employers and employees. The idea was that employers would be more likely to hire a worker who had already suffered from injury or debilitation if they knew that a further on the job injury would be covered by a second fund—one administered by the state rather than the employer. So the employer would have an employee whose potential worker’s comp claims were covered by an outside source, the employee would have a job and the promise of worker’s comp if necessary, and the state would have more employed residents. Everyone wins.

The State of the Fund

Now, however, the fund is in imminent danger of running dry and the Missouri Attorney General is moving to prevent it from becoming overdrawn. Although a number of different solutions to the problem have been discussed, there has been no governmental consensus on the matter as of yet. Until there is, or until more funds accumulate, the Attorney General has halted second fund offers. That means that no new second fund claims will be honored for the time being. No one is really sure at this point how his decision will ultimately affect current and future cases, but some things will definitely have to change.