On April 20, 2021, the Missouri Supreme Court issued a decision in the long-anticipated Parker v. Treasurer of State of Mo. as Custodian of Second Injury Fund case addressing the proper analysis for Second Injury Fund liability for permanent total disability benefits relating to injuries occurring after January 1, 2014.
In 2013, the Missouri legislature enacted new provisions to Section 287.220 addressing the Second Injury Fund’s liability for permanent total disability benefits for injuries occurring after January 1, 2014. Subsection 3 of Section 287.220 requires the employee to meet two conditions to qualify for a claim for permanent total disability benefits against the Fund:
- The employee must have a medically documented preexisting disability equating to at least 50 weeks of permanent partial disability, and
- The employee must show he subsequently sustained a work-related injury.
To be a qualifying preexisting disability under the first condition, the disability must fall into one of four categories.
- The direct result of active US military duty;
- The direct result of a compensable injury as defined under section 287.020;
- A preexisting disability which directly and significantly aggravates or accelerates the subsequent work-related injury; or
- A preexisting permanent partial disability of an extremity opposite of the primary injury, loss of eyesight in one eye, loss of hearing in one ear, when there is a subsequent compensable work-related injury of the opposite extremity, loss of eyesight in the other eye, or loss of hearing in the other ear.
The employee in the Parker case had prior injuries involving his low back and knee. The employee sustained a work-related injury to his right elbow and shoulder in March of 2014. He later sustained a second work-related injury to his neck in June of 2014. At trial, the employee argued he was permanently and totally disabled as a result of the combination of the injuries from March 2014 and June 2014.
Permanent Total Disability Issues Addressed by the Supreme Court:
The Supreme Court addressed 3 important issues regarding permanent total disability benefits against the Fund.
- Whether an employee’s preexisting disability that has not reached maximum medical improvement when the primary injury occurs can be considered under the first condition for permanent total disability benefits against the Fund?
- Whether multiple disabilities which meet the first condition can be considered in conjunction with the primary injury in a claim for permanent total disability benefits against the Fund?
- Whether all preexisting disabilities, regardless of whether they meet the conditions of Section 287.220.3, can be considered in conjunction with the primary injury in a claim for permanent total disability benefits against the fund?
Supreme Court’s Findings:
The Supreme Court held that a prior disability which has not reached maximum medical improvement at the time of the primary injury can still meet the first condition of a qualifying preexisting disability under Section 287.220.3. Therefore, a preexisting medical condition that has not reached MMI can still be considered in determining whether the Second Injury Fund is liability for PTD benefits, as long as the preexisting condition meets the 50-week threshold and meets one of the four criteria under Section 287.220.3(2)(a).
Consideration of single vs. multiple qualifying disabilities:
The Supreme Court held that section 287.220.3(2)(b), which reads “when combined with the preexisting disability,” can be read in its plural form. Therefore, all preexisting disabilities which meet the minimum 50-week threshold, as well as one of the four eligibility criteria under 287.220.3(2)(a), can be considered in conjunction with the primary injury to determine whether the Fund is liable for permanent total disability benefits.
Consideration of whether all preexisting disabilities can be included in PTD analysis:
The Supreme Court clarified the second condition specifies that the preexisting disabilities considered in conjunction with the primary injury must meet the eligibility criteria to be considered in a permanent total disability claim against the Fund. Therefore, preexisting disabilities that do not meet the 50-week threshold, or do not meet one of the four eligibility criteria under 287.220.3(2)(a), are not to be considered when determining Second Injury Fund liability for PTD.
Impact on the Employer & Insurer’s Perspective:
From the Employer and Insurer’s perspective, the primary takeaway from the decision is that all disabilities which meet the 50-week threshold and eligibility requirements can be considered in cases where the employee is alleging permanent total disability against both the Employer/Insurer and the Fund. The Employer and Insurer can assert under the Parker decision that all qualifying preexisting disabilities should be considered against the Fund when defending permanent total disability claims on the basis the permanent total disability occurred as a result of the primary injury in combination with preexisting disabilities.
However, the Court’s decision effectively eliminates consideration of all other disabilities that do not meet the 50-week threshold or one of the four eligibility criteria under 287.220.3(2)(a), regardless of whether the employee has another preexisting disability which does qualify under the first condition. For example, if an employee has a prior disability of 75 weeks, and an additional prior disability of 45 weeks, the Court can only consider the prior 75-week disability when analyzing Second Injury Fund liability for PTD. The 45-week disability cannot be considered.
Overall, this decision provides adequate defenses for Employers and Insurers to shift liability for employees who are permanently and totally disabled with qualifying preexisting conditions to the Fund. The decision, however, does eliminate the argument that all medically documented preexisting conditions, even those which do not meet the eligibility requirements, can be considered when analyzing Second Injury Fund liability for PTD.
Questions Answered by the Parker decision:
- Can a prior that’s not yet a MMI be considered for SIF liability if it qualifies under the statute otherwise?—YES
- Can multiple prior injuries that meet statutory qualifications be considered in determining PTD against the Fund?—YES
- Can prior injuries that do not meet statutory qualifications be added to the PTD analysis against the Fund? —NO