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Disabled Missouri Workers Lose Second Injury Fund Lawsuit

On behalf of Brown & Crouppen, P.C. posted in Workers’ Compensation on Wednesday, April 25, 2012

The federal judge presiding over a lawsuit filed against the State of Missouri by four workers who say they are owed benefits from the state’s Second Injury Fund recently dismissed the suit despite acknowledging the plaintiffs are entitled to the benefits. The judge said that the plaintiffs could not show that they could not show they had been discriminated against due to their disabilities, and the possibility of receiving the benefits someday means that they have not been deprived of their property. While the suit appears to be finished, it may have spurred action in the Legislature to rescue the fund, albeit in a reduced version.

As we have discussed in the past, Missouri’s Second Injury Fund is a workers’ compensation program for disabled people whose disabilities are made worse through a work injury. The program is funded through a surcharge on employers’ workers’ compensation insurance, but a 2005 law that capped the surcharge at 3 percent has left the fund severely short on cash. Attorney General Chris Koster stopped paying benefits on new claims in March 2011, leaving some 200 people without the benefits to which they are entitled under the law.

Four of the workers filed suit against the state in federal court. They argued that the denial of benefits amounted to discrimination under the Americans with Disabilities Act and violated their employment contracts.

The state moved to dismiss the lawsuit and the judge granted that motion in mid-April. In her ruling, the judge wrote that, while the plaintiffs have not received any actual money from the Second Injury Fund, they have been approved for benefits. The judge deferred to the Legislature’s right to de-fund state programs and said the plaintiffs’ so-far worthless approvals for compensation have not been taken away.

She also ruled that the plaintiffs had no evidence that the state was denying benefits strictly because they are disabled.

Still, the plaintiffs may not have filed the suit in vain. The House has voted to gradually increase the insurance surcharge that supports the fund to 6 percent, though the bill would also sharply restrict the people who could apply for compensation.

Source: Kansas City Business Journal, “Missouri Second Injury Fund suit is dismissed,” David Twiddy, April 23, 2012

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