Articles & Updates

Missouri Workers' Compensation Legislative Changes 2014 Summary

by James B Kennedy

CLIENT ALERT

Re: 2013 Missouri Workers’ Compensation Legislative Changes, effective January 1, 2014

On May 16, 2013 the Missouri General Assembly passed the latest Conference Committee Substitute for Senate Bill 1 (SB 1). What started out as an effort to address the occupational disease issues created by the adoption of the rule of strict construction in 2005, and to address the viability of the Second Injury Fund, turned into the passage of a much broader set of amendments that constitute mixed results from the prospective of industry. Governor Nixon is expected to sign the bill.

The effective date, when Governor Nixon signs it, is January 1, 2014.

First, the good:

·      The term “employee” shall not include those who work for a religious, charitable or relief organization where their compensation is limited to board, lodging, aid or sustenance. Sec. 287.020.1.

·      An amendment to Sec. 287.280 now provides that an employer may insure or self-insure their employers liability (Coverage B, a/k/a Coverage 2). This amendment addresses the issue that has recently been raised by the Division of Workers’ Compensation over a self-insurance trust’s authority to offer Coverage B along with coverage intended to pay for benefits claimed exclusively under the WC law.

·      The phrase “occupational disease” has been added to Sec. 287.120 to make it clear that occupational disease is indeed part of Chapter 287 and that the workers’ compensation law is intended to be the employee’s (or dependent’s) exclusive remedy where an occupational disease has been contracted.

·      An amendment to Sec. 287.140 has now created a Statute of Limitations applicable to additional payment medical fee disputes. Subsections .4(1) provides that in the case of medical services rendered prior to July 1, 2013, that the application for additional payment must be filed within 2 years from when the provider is first notified of the dispute and .4(2) reduces the statutory period to 1 year in the case of services rendered after July 1, 2013. It should be noted that this section does not refer to applications for direct payment, which are distinct from additional payment applications, but direct payment applications are resolved along with the claim, so a provider cannot later file a direct payment application, as they can an additional payment application, once the underlying claim has been settled, litigated or dismissed.

Next, the largely neutral:

·      The presumption of compensability under Sec. 287.067.6 applicable to psychological stress by paid firefighters has now been expanded to include paid peace officers who are certified under Chapter 590.

·      Under an amendment to Sec. 287.120.1, the Second Injury Fund is given the right to have the employee examined but only if the employer has not done so.

·      An employee cannot file a claim against the Second Injury Fund if they have opted to pursue benefits under some other state’s WC law. Sec. 287.220.12 This prevents an employee from pursuing primary injury benefits in some other state but then filing a claim against the Second Injury Fund in Missouri.

Now, the ugly:

·      Sec. 287.067.11 creates a category of occupational diseases to be known as “occupational diseases due to toxic exposure”. These are limited to mesothelioma, asbestosis, beryllosis, coal worker’s pneumoconiosis, bronchiolitis obliterans, silicosis, silocotuberculosis, manganism, acute myelogenous leukemia and myelodysplastic syndrome.  Why is this important? Read on.

·      Sec. 287.200.4 will now provide that in the event that an employee becomes permanently totally disabled or dies as the result of one of the specified toxic exposure occupational diseases, that in addition to the normal benefits paid in the case of total disability or death, that the employer shall pay 100 weeks of compensation at a rate equal to 200% of the average state wage except if the disease that caused the total disability or death is mesothelioma, and where the employer has accepted mesothelioma liability, then the rate of compensation is based upon 300% of the average state wage and is to be paid for a period of 212 weeks. However, should an employee contract both asbestosis and develop mesothelioma, they will only be compensated for the laTter.

·      The employee or dependents can’t receive both regular permanent total disability or death benefits simultaneously with the enhanced benefit but the regular benefits become due when the enhanced benefits are exhausted. In addition, the suspension of benefits that can take place under subsection .3 of 287.200 (where the employee is restored to work after being awarded permanent total disability benefits) shall not apply in the case of toxic exposure occupational diseases.

·      The enhanced benefits survive the employee’s death and any unpaid enhanced benefits must be paid to the employee’s dependents or become an asset of the employee’s estate if there are no dependents.

·      SB 1 goes on to create a new fund, the “Missouri Mesothelioma Risk Management Fund”, which any employer can join. Although space doesn’t allow for a detailed discussion of the 33 provisions of Sec. 287.223 relating to this new fund, suffice it to say that if an employer does not become of member of the Fund, that is “rejects mesothelioma liability”, then under Sec. 287.067.4(3)(b) the employer loses the exclusivity protection afforded by 297.120. If it is any comfort, this last provision expires on December 31, 2038.

·      It should be noted that there is no provision allowing the employer to purchase insurance to cover mesothelioma liability and this liability may be exclusively that of the employer, although the law is open to interpretation in that regard. In addition, although many employments may not involve exposure to any of the toxic substances that cause the specified diseases, no categories of employment are exempted from 287.223.

·      SB 1 does address, in quite some detail, Second Injury Fund issues. In fact, SB 1 rewrites large portions of Sec. 287.220.

·      Second Injury Fund payments will no longer be allowed for permanent partial disability.

·      Claims for permanent total disability shall only be allowed where the prior disability (for Second Injury Fund disability purposes) is a medically documented disability due to military duty or preexisting disability of at least 50 weeks that is either due to active military duty, the direct result of a compensable injury, was not compensable but aggravates the subsequent injury or involves preexisting permanent partial disability of an extremity, the loss of eyesight in one eye, or the loss of hearing in one ear, where the subsequent injury is to the opposing extremity, or involves a loss of sight in, or the loss of hearing in, the opposite eye or ear.

·      Employees of sheltered workshops only have access to the Second Injury Fund where their preexisting disability and the current disability results in permanent total disability. (Duh!)

·      The Fund is no longer liable for medical expenses where the employer is uninsured.

·    Fund payments are assigned priority, with defense costs and expenses being given the highest priority followed in turn by permanent total disability cases that are settled or fully adjudicated, permanent partial disability cases that are settled or fully adjudicated, medical expenses incurred before July 1, 2012 and finally, interest on unpaid awards.

·      A supplemental surcharge (against employers) not to exceed 3% is to be added to the existing 3% surcharge to finance the Fund beginning in 2014 to run through 2021.

·      SB 1 also includes provisions dealing with committee on the retention of Administrative Law Judges and individual insurer’s risk premium modification rating plans.

·      Furthermore, the employer will no longer have a right of subrogation in any third party injury or wrongful death case if the injury of death is the result of a toxic exposure occupational disease. Sec. 287.150.7.

In conclusion, although SB 1 does bring occupational disease back into the WC fold, and contains several other beneficial provisions, the amendments create a new category of favored occupational diseases for which benefits are provided that are not available to those who are as badly injured or killed due to accidental injuries, deprives employers of their potential subrogation rights with respect to those favored occupational diseases and increases the cost to employers of supporting the Second Injury Fund, at least over the short term.

Questions or comments? Contact and of the following: Jkennedy@evans-dixon.com or call 314-552-4020; mbanahan@evans-dixon.com, 314-552-4002; ttierney@evans-dixon.com, 314-522-4041; revans@evans-dixon.com, 314-552-4008

 

 

Copyright: Evans & Dixon, L.L.C. 2013.