Avoiding Second Injury Fund Insolvency: What Will it Take to Obtain Permanent Total Disability Benefits?

The Second Injury Fund was created in 1943 to curb disability discrimination by employers. Instead of employers covering the cost of disability benefits, employees may obtain benefits under Mo. Rev. Stat. § 287.220. Depending on an employee’s condition, an injured worker may be eligible for Permanent Partial Disability (“PPD”) or Permanent Total Disability (“PTD”) benefits under the statute. However, approximately 10 years ago, it underwent significant changes, and the Supreme Court of Missouri applied these changes to a claim for Permanent Total Disability.

By: Harry Bell

Swafford v. Treasurer of Missouri, 659 S.W.3d 580, 581 (Mo. 2023) (en banc)


            Historically, employers have been reluctant to hire individuals with preexisting disabilities due to concerns that on-the-job injuries would exacerbate or worsen existing conditions and expose employers to greater financial liability.[1] The Second Injury Fund was created in 1943 to curb this discrimination by employers.[2] An employer may still be liable for disability benefits in some instances; however, an employee may obtain benefits under Mo. Rev. Stat. § 287.220.[3] Depending on an employee’s condition, an injured worker may be eligible for Permanent Partial Disability (“PPD”) or Permanent Total Disability (“PTD”) benefits.[4]

            Due to the fund’s eventual insolvency, the legislature amended the statute in 2013 to place greater restrictions on qualifications for benefits.[5] In Swafford, the Supreme Court of Missouri grappled with one of the amended provisions and applied its restrictions to a claim for Permanent Total Disability.


            James Swafford was a hostler for a trucking company (Waller Truck Co.) and suffered from disabilities including ankylosing spondylitis, bursitis, and certain cardiac conditions.[6]  In October 2017, Swafford slipped and fell while exiting a truck. As a result of the fall, he suffered from rotator cuff and labrum tears.[7]  Subsequent to his slip and fall accident, he filed for PTD benefits pursuant to RSMo. 287.220.3(2)(a)(a)(iii).[8]  This statute allows for workers to collect benefits if they have preexisting disabilities/injuries that “directly and significantly aggravate[] or accelerate[]” the primary/last injury complained of.[9]  To support his claim for PTD, Swafford presented medical evidence from Dr. Erich Lingenfelte, Dr. Huston, andDr. Brent Koprivica.[10]  Dr. Koprivica’s medical analysis indicated that a “significant synergistic effect” existed between Swafford’s primary and preexisting disabilities.[11] Dr. Linenfelter’s medical analysis indicated that, as a result of the fall, Swafford now has inflammatory bursitis, which is “likely exacerbated by his disease process.”[12] Lastly, Dr. Hustons medical records show a decrease in range of motion in his right shoulder from March 2017 to October 2017, which may have worsened the primary injury.[13]

            The Administrative Law Judge (“ALJ”) concluded that this evidence alone was insufficient to satisfy the standard set forth in RSMo. 287.220.3(2)(a)(a)(iii).[14]  Swafford appealed the ALJ’s ruling to the Labor and Industrial Relations Commission (“the Commission”).[15]  The Commission affirmed the ALJ’s ruling, and Swafford appealed the case to the Supreme Court of Missouri.[16]  On appeal, Swafford argued that the “[C]ommission erred in determining [that he] failed to establish that he is entitled to PTD benefits from ‘the [Second Injury] Fund’” (internal quotations added).[17]  The Supreme Court of Missouri held that Swafford did not sufficiently prove that his preexisting disabilities had the requisite effect on his primary injury to entitle him to PTD benefits.[18]  Accordingly, the court affirmed the commission’s ruling and held its findings were supported by the proffered evidence in the case.[19]

III.       Legal Background

            RSMo. § 287.220 addresses the Second Injury Fund (“the Fund”) that is used for disability compensation and special weekly benefits in rehabilitation cases.[20]  Due to insolvency of this fund, the legislature amended RSMo. § 287.220 in 2013 to mitigate the number of compensable PTD disability claims.[21]

            If a primary injury occurred prior to January 1, 2014, PTD benefits will be provided if an individual is deemed permanently and totally disabled due to the “combined effects of any ‘qualifying preexisting disabilities’ and the primary injury” (internal quotations added).[22]  On the other hand, RSMo. § 287.220.3 is reserved for primary injuries that occur after January 1, 2014.[23]  This provision sets forth a more rigorous standard for receiving PTD benefits.[24] A claimant must satisfy two requirements under Section 287.220.3: (1) an employee must have a qualified preexisting disability that satisfies any of the categories listed in subsections (i)-(iv) of section 287.220.3(2)(a)(a); and (2) the employee sustains “a compensable work related injury that . . . results in a permanent total disability. . . .”[25]

            The Division of Workers’ Compensation of the Department of Labor and Industrial Relations oversees compensation disputes through ALJs.[26]  [27]  However, the Labor and Industrial Relations Commission of Missouri “. . . may at any time upon a rehearing after due notice to the parties interested review any award and on such review may make an award ending, diminishing or increasing the compensation previously awarded . . . .”[28]  The award of the commission and its finding of facts are conclusive and binding, unless: “(1) [] the commission acted without or in excess of its powers; (2) [] the award was procured by fraud; (3) [] the facts found by the commission do not support the award; (4) [] there was not sufficient competent evidence in the record to warrant the making of the award.”[29]  In any of these scenarios, a court may hear the case.[30]  After evaluating whether the administrative agency’s findings are or are not “supported by competent and substantial evidence upon the whole record,” the court may modify, reverse, or remand the claim for further proceedings.[31]

IV.       Instant Decision

            Judge Mary Russell, writing for the majority, held that the Commission did not err in concluding that Swafford failed to establish a claim under Section 287.220.3(2)(a)(a)(iii), and that its ruling was “supported by substantial and competent evidence.”[32]  Judges Patricia Breckenridge and George Draper III dissented, arguing that Swafford proffered sufficient evidence to state a claim for benefits under Section 287.220.3(2)(a)(a)(iii).[33]

A.    Majority Opinion

            The court emphasized that the commission made a lawful determination that the medical testimony provided by Dr. Lingenfelter did not factually establish that Swafford’s preexisting disabilities “significantly and directly aggravated his primary injury.”[34]  The court held that Swafford’s evidence was not “disregarded,” but found insufficient in the eyes of the ALJ presiding over the case as well as the Commission.[35]  Judge Russell pointed out that a “worsening” effect may not necessarily cross the threshold into “significant” and “direct” aggravation.[36]

            The court referred to the plain language of the statutory provision regarding preexisting disabilities’ effect on primary injuries, and it engaged in statutory interpretation.[37]  It isolated each word to decipher the provision’s meaning and found that the statute demands preexisting disabilities have more than an incidental effect on the primary injury.[38] They must “clearly [directly and significantly] exacerbate the primary injury in a meaningful way.”[39]  Dr. Lingenfelter acknowledged that Swafford’s preexisting disabilities had an effect on his primary injury; however, he failed to showcase “the extent to which any of those disabilities exacerbated” the primary injury.[40] Lastly, Dr. Koprivica’s statement that Swafford’s preexisting disabilities have a “synergistic effect” on his primary injury reflects the less-stringent qualifying standard outlined in Section 287.220.2., not Section 287.220.3.[41]

B.    Dissenting Opinion

            Judge Breckenridge dissented that the medical evidence presented by Dr. Lingenfelter, Dr. Huston , and Dr. Koprivica all supported the contention that Swafford’s preexisting disabilities (ankylosing spondylitis and hypertrophic cardiomyopathy) sufficiently affected his primary injury.[42]

            The dissent insists Dr. Lingenfelter’s Independent Medical Exam (“IME”) shows the extent to which Swafford’s ankylosing spondylitis affects his primary injury.[43]  In the IME, Dr. Lingenfelter stated he “thinks that [Swafford] does now have inflammatory bursitis as a result of the fall and that fall is the sentinel event and primary prevailing factor in his inflammatory bursitis and AC join arthropathy.”[44] Dr. Lingenfelter went on to say that that “the chronic inflammatory bursitis . . . is likely exacerbated by [Swafford’s] disease process . . . .’[45]  The dissent found this evidence to be substantial.[46]  Moreover, the dissent referenced the appellant’s rheumatology records and pointed out that he was experiencing decreased range of motion in his shoulder prior to the incident in question due to his ankylosing spondylitis, and the primary injury was worsened by this condition.[47] Lastly, the dissent found Dr. Koprivica’s statement compelling: “[W]hen one looks at the impact of combining the significant preexisting industrial disabilities that I have identified with the additional disability attributable to the October 6, 2017, work injury claim, there is a significant synergistic effect.”[48]

V.       Comment

            Swafford highlights the stringent nature of RSMo. § 287.220.3(2)(a)(a)(iii) and how it is applied in cases where individuals wish to obtain benefits under a claim of permanent total disability. The court accurately relied on the plain language of the statue as well as the historical context in which it was developed to ascertain the provision’s meaning. The majority correctly identified that the 2013 amendment to Section 287.220 was designed “to limit the number of workers eligible for fund benefits because the [Second Injury] Fund was insolvent.”[49] The strict language used by the legislature in Section 287.220.3 was incorporated in the statute to reflect that goal.

            Furthermore, the court gave proper weight and consideration to the discretion of the ALJ and the Commission. Administrative rulings are given deference and their findings are not easily overturned, except in a narrow set of circumstances outlined in RSMo. § 287.495.[50] The court correctly concluded that the commission did not act outside of its discretion by finding that the appellant’s proffered evidence was “vaguely worded” and failed to meet the threshold showing established under section 287.220.3.[51]

            The dissent relied on medical evidence that, indeed, demonstrated a worsening of the appellant’s overall condition. However, the dissent did not point towards medical evidence that adequately proved that the appellant’s preexisting conditions significantly and directly aggravated his primary injury. In fact, it is arguable that the medical records show the primary injury significantly aggravated the appellant’s preexisting conditions.

VI.       Conclusion

            Overall, Swafford articulates the standard for injured workers seeking to obtain permanent total disability benefits. The strict standard imposed by the legislature in 2013 may result in (if it has not yet) a decrease in PTD claims, which in turn will mitigate the risk of insolvency.

[1] See generally Jason R. McClitis, Missouri’s Second Injury Fund – Should It Stay or Should It Go?: An Examination of the Question Facing the Missouri State Legislature, 74 Mo. L. Rev. 399 (2009).

[2] Id. at 401.

[3] Aaron Hadlow, Distinct questions: Permanent total disability benefits under Missouri’s Workers’ Compensation and Second Injury Fund Statute, Mo. Bar Vol. 78, No. 5 (2022).

[4] Id.

[5] Id.

[6] Swafford v. Treasurer of Missouri, 659 S.W.3d 580, 581 (Mo. 2023) (en banc).

[7] Id.

[8] Id.

[9] Mo. Rev. Stat. 287.220.3(2)(a)(a)(iii) (2021).

[10] Swafford, 659 S.W.3d at 581–82.

[11] Id. at 582.

[12] Id.

[13] Id. at 587 (Breckenridge, J.,dissenting).

[14] Id. at 582.

[15] Id.

[16] Id.

[17] Id. at 582-83.

[18] Id. at 585.

[19] Id.

[20] Mo. Rev. Stat. § 287.220 (2021).

[21] Weibrecht v. Treasurer of Missouri, 659 S.W.3d 588, 590 (Mo. 2023) (en banc) (citing Treasurer of Missouri. v. Parker, 622 S.W.3d 178, 181 (Mo. 2021) (en banc). Under this chapter, the term “total disability” refers to an “inability to return to any employment and not merely. . . inability to return to the employment in which the employee was engaged at the time of the accident.” Mo. Rev. Stat. § 287.020 (2021).

[22] Swafford, 659 S.W.3d at 584; Mo. Rev. Stat. § 287.220.2 (2021).  

[23] Weibrecht, 659 S.W.3d at 591; Mo. Rev. Stat. § 287.220.3(1) (2021).

[24]  Swafford, 659 S.W.3d at 584.

[25] Mo. Rev. Stat. § 287.220.3(2)(a)(a)(i-iv) (2021); Mo. Rev. Stat. § 287.220.3(2)(b) (2021).

[26] Mo. Rev. Stat. § 287.460.1 (2012).

[27] Id.

[28] Mo. Rev. Stat. § 287.470 (2000).

[29] Mo Rev. Stat. § 287.495 (2000).

[30] Mo. Const. art. V, § 18.

[31] Id.see also Mo. Rev. Stat. § 287.495.1 (2000).

[32] Swafford v. Treasurer of Missouri, 659 S.W.3d 580, 585 (Mo. 2023) (en banc).

[33] Id. (Breckenridge, J., dissenting).

[34] Id. at 583.

[35] Id.

[36] Id.

[37] Id. at 584.

[38] Id.

[39] Id.

[40] Id.

[41] Id. at 585.

[42] Id

[43] Id. at 586.

[44] Id.

[45] Id.

[46] Id.

[47] Id. at 587.

[48] Id.

[49] Id. at 584.

[50] Mo. Rev. Stat. § 287.495 (2000).

[51] Id. at 583.