Supreme Court Sets New Precedent With Workers' Comp Ruling
By DAVID A. LIEB, Associated Press - February 11, 2007JEFFERSON CITY, Mo. - Like many senior citizens these days, retired electrician Fred Schoemehl never fully retired.
At age 76, after moving from the St. Louis area to the Lake of the Ozarks, Schoemehl was still working at a local marina and yacht club. While on the job May 11, 2001, Schoemehl twisted his knee trying to stand up.
He was awarded workers' compensation benefits, but died in January 2004 of an unrelated cause just one month after those payments finally began.
Now it appears, Schoemehl's legacy could mean thousands - even millions - of more dollars to the families of other injured workers who die.
In a 4-3 decision on a case brought by Schoemehl's widow, the Missouri Supreme Court this month reversed the long-held assumption that workers' compensation payments end when an injured employee dies of an unrelated cause.
Instead, the court said, surviving dependents are entitled to continue receiving the payments due a deceased worker who had been "permanently and totally disabled."
Employers are howling about the ruling. Attorney General Jay Nixon's office plans to ask the Supreme Court to reconsider. And state Sen. Chris Koster, R-Harrisonville, already has filed legislation to reverse the precedent-setting decision.
"The cost to Missouri employers is unfathomable," said Gary Marble, president of Associated Industries of Missouri. "Basically, if not corrected, the workers' compensation system has been relegated to a life insurance policy in addition to the legally mandated coverage for injured workers."
St. Louis attorney Dean Christianson, who represented Annette Schoemehl, called that assertion "way over the top."
But attorneys, employers and insurers alike agree the ruling is likely to drive up the cost of some workers' compensation cases - and thus also the cost of insurance charged to employers. The unanswerable question is how large those costs will be.
A look at Schoemehl's case provide at least a glimpse of the costs.
Fred Schoemehl had been due payments of $221.26 a week. As a result of the ruling, Annette Schoemehl, 65, will be due at least three years' worth of payments - amounting to about $41,000 plus interest, at the time of the Jan. 9 Supreme Court ruling. She also will be due $221.26 for each additional week of her own life.
And Annette Schoemehl won't be the only one to benefit.
"This (decision) will apply to others - there's no doubt about that," Christianson said.
The opinion written by Supreme Court Judge Richard Teitelman cited a section of law stating that injury payments shall cease when an employee dies of an unrelated cause, "unless there are surviving dependents at the time of death." Teitelman then cited another section of law defining an "employee who has been injured" but dies to "also include his dependents."
As such, Teitelman concludes, Annette Schoemehl became the injured "employee" after her husband died. Following that reasoning, dependent children also would be eligible for workers' compensation payments after the death of a parent or guardian.
Insurance companies already calculate injured employees' average life expectancies when accounting for how much money they likely will receive. But factoring in the life expectancies of their spouses or children is more complicated and certainly would drive up the costs, said Steve Millikan, vice president of Columbia-based Missouri Employers Mutual Insurance.
The bottom line: workers' compensation insurers will have to charge more to employers, he said. But it's too soon to say whether those premiums will rise by a significant or minimal amount, Millikan said.
The costs to employers may be limited because the Supreme Court ruling applies only to survivors of injured people who suffered total (as opposed to partial) disabilities that were permanent (as opposed to temporary) in nature.
Missouri Employers Mutual is one of the largest workers' compensation insurers in the state. Yet since it opened in March 1995, the company has averaged just five permanent, total disability cases a year, Millikan said. And in that time, just two people have died of causes unrelated to their injuries. (When workers later die because of their injuries, their survivors already are due benefits under state law.)
Cape Girardeau attorney Mike Moroni leads The Missouri Bar's workers' compensation committee and previously presided over workers' compensation cases as a state administrative law judge. As a result of the Supreme Court ruling, Moroni said he may seek more money for clients who have permanent, total disability cases.
"This is a big change in the law - no question about it," Moroni said. But "in the long-run, I don't think it's going to make that big of a difference."
"Granted, there will be more money paid out," Moroni said, but not as a huge percentage of the total workers' compensation benefits.
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