The specific legal issue: Must the Fund pay a statutory permanent partial disability enhancement based on calculations, which included a worker's pre-existing conditions, that did not meet the threshold for fund liability?
For the fourth time in a month, a Missouri appellate court panel is asking the state's highest court to give some guidance.
The most recent request comes from a case arising out of the claim of Eric Buhlinger, who suffered a concussion and sustained injuries to his neck, back and left elbow while working for Sherrell Construction Inc. in August 2008.
He had a previous a crush injury to his left foot while working for another employer in 1991.
Buhlinger filed a claim for workers' compensation benefits based on his 2008 injury, and an administrative law judge determined he had sustained permanent partial disabilities of 27.5% of the body as a whole referable to the neck, 5% of the body as a whole for the concussion and 5% of the left elbow. The judge ruled that he had a pre-existing permanent partial disability of 17.5% regarding the left ankle from the 1991 injury.
When calculating Buhlinger's overall disability, the judge included the 27.5% cervical spine; 5% concussion; 5% left elbow, and 17.5% left ankle. The judge then applied a 10% enhancement factor and ordered the fund to pay Buhlinger $6,782.10 in benefits.
The fund appealed to the Labor and Industrial Commission, arguing that the judge erred in including the concussion and elbow injury in the disability calculations, since they fell below the statutory threshold for inclusion set forth in Missouri Revised Statutes Section 287.220.1.
While the Court of Appeals reasoned that the "plain and ordinary language of Section 287.220.1 directs the Commission to evaluate individually each disability to determine whether it satisfies the statutory thresholds and thereby implicates Fund liability," it also said that because Buhlinger's elbow injury and concussion do not meet the initial threshold for injuries to trigger Fund liability, they should not have been included in the final calculation of the fund's liability.
The Court of Appeals ordered the case transferred to the Missouri Supreme Court for consideration to join three other cases which were sent up to the high court in September. Those cases are Dyson v. Treasurer of the State of Missouri, Salviccio v. Treasurer of the State of Missouri and Treasurer of the State of Missouri v. Witte.
The real issue isn't legal, of course - it's monetary. The Second Injury Fund of Missouri faces the same fiscal issues that other second injury funds have encountered along the way - insufficient funding.
The Fund was created in 1943 for the altruistic purpose of assisting the physically handicapped and individuals with existing work-related disabilities and to encourage employers to hire and retain previously disabled individuals. Liability for an employee’s injury is shared between the employer and the Fund – the employer is responsible for the portion of the disability that can be attributed to the work-related injury, while the Fund is responsible for the remaining disability.
The Fund is financed by a surcharge on a percent of assessable premiums that is levied on insurance companies and self-insurers four times a year. The surcharge is capped at 3% due to a legislative change in 2005. This has created an artificial funding limitation, and placed the Fund under considerable fiscal strain, with legal scholars arguing for elimination of the cap.
Another fiscal strain is that authority lies with the state's Attorney General's office to settle such cases by lump sum, which imposes cash flow strain on the fund since income is restricted by the 3% cap.
The Fund's fiscal solvency is no small problem for the people of Missouri.
According to the Missouri Chamber of Commerce, more than 100 injured workers are waiting for benefit payments from the Fund that have been already awarded to them and more than 30,000 workers are waiting to have their cases heard through the Fund, with no idea when their cases will be resolved.
According to the Chamber, because of high unemployment and the commensurate decline in workers’ compensation premiums, money going to the Fund has declined dramatically. In 2007, Fund revenue from the 3-percent surcharge totaled $70 million. In 2011, Fund revenue totaled $40.4 million. In 2011, Fund expenses were approximately $55 million. As a result, in 2009, Attorney General Chris Koster suspended all settlement offers, which resulted in the backlog of 30,000 cases.
In addition, Fund liability has grown through judicial interpretation of the relevant statutes. And adjudicating pending cases costs the Fund millions of dollars - money that doesn't go to benefits.
To the larger population, something like the Fund is a minor issue. To those 30,000 people though it's hard to tell them that their state can't provide for them because of artificial limitations.
Many states have eliminated Second Injury Funds over the past few years because of financial reasons, and the fact that there are federal laws now (e.g. the ADA) that impose restrictions and penalties for disability discrimination.
But Second Injury Funds aren't really about discrimination - they serve a different purpose. State legislatures need to decide what they want and in the specific case of Missouri, either find a way to fund the Fund adequately or just stop the charade and eliminate it.