The Second Injury Fund was founded in 1943 to basically encourage employers to hire veterans who were wounded in war. The Fund promotes employment by permitting persons to be employed without exposing employers to liability for previous injuries. It receives its state funds to pay awards from a surcharge placed upon all Missouri employers’ workers’ compensation premiums paid in this state. Prior to 2005, the surcharge fluctuated based on revenue needs of the fund as estimated by the Director of the Division of Workers’ Compensation on an annual basis. Then, in 2005, a very pro-business legislature whose business constituents were tired of paying high and fluctuating premiums changed the law to cap the surcharge at 3% with no fluctuation or cost of living increase.
Ever since then, there have been warnings that the Fund would eventually run out of money. For the last 6 years, the state auditor has predicted it, but the heavily pro-business legislature has ignored the warnings. Attorney General Koster has warned that the legislature needs to act fast or the Fund could be out of money by April, 2011.