Second Injury Funds Are History In Some States But Not In CA
By Michelle Logsdon - November 29, 2001It’s the end of the road for Oklahoma’s “second injury” fund that helped disabled workers get jobs and provided a financial safety net for employers.
Insurmountable debt is to blame for the abandonment of the Multiple Injury Trust Fund that was set up during World War II to protect employers from higher workers’ compensation rates should a partially disabled worker become fully disabled as a result of a second on-the-job injury.
This type of fund provides a comfort zone for employers concerned about hiring a person with an existing disability.
Several other states across the country have dropped similar funds because of financial woes as well. In an attempt to keep workers’ compensation premiums affordable for employers, Oklahoma, and other states like it, did not collect enough money for the second injury funds and struggled to make weekly payments to workers.
In Oklahoma workers filed a class-action lawsuit in 1987 because of the late payments. The workers won to the tune of $44 million. But because the state did not have the money to pay the settlement the debt increased to approximately $80 million last year when a state court added compound interest.
California created a similar fund in 1945 called the Subsequent Injury Fund (SIF). The state’s Division of Workers’ Compensation (DWC) administers the fund. DWC spokesman Richard Stephens told adjustercom.com that California’s fund is doing fine financially.
The California SIF provides benefits for workers with an existing disability or impairment at the time of injury. In order to receive benefits, the employee must be 70 percent permanently disabled with the combination of both injuries. The State Compensation Insurance Fund administers payments to employees once they have received an award from the Workers’ Compensation Appeals Board and the award is authorized by the DWC’s Claims Unit.
Subsequent worker injuries are handled under workers’ compensation but they are treated somewhat differently.
Stephens’ gave a hypothetical example of how the fund is managed. An employer hires a disabled person (hypothetically blind in one eye). The existing disability is rated at 20 percent. The person on the job loses his other eye. Now totally blind, the person is rated at 90 percent disabled. The employer is only liable for 70 percent of the disability. The SIF covers the original 20 percent which occurred prior to employment.
The SIF is funded in two ways. First, the state receives revenues from workers’ compensation cases in which the employee dies and no dependents exist to receive the benefits. The rest of the money comes out of the state’s General Fund.
Stephens said DWC saw 482 new second injury cases in 1998. The state paid a total of $7.6 million in benefits for those cases. $2.9 million of that money came from deceased workers’ compensation cases with no dependents and $4.7 million came from the General Fund.
In 1999, the DWC reported 536 second injury cases totaling $7.8 million in payments. The deceased workers fund paid $3.3 million and the General Fund took care of the remaining $4.5 million.
The figures for 2000 are still being processed.
Stephens said no amount of money taken from the General Fund is insignificant but the total of that fund lingered around $70 million during those two years.
While California workers and employees may be safe from second injury worries, the 16 states that have reformed or closed their funds are looking to new avenues for protection. Oklahoma Sen. Brad Henry told the Associated Press that workers would still be sheltered from discrimination because of the Americans with Disabilities Act. “I don’t see that you’re going to see a rush of employers failing to hire workers with prior injuries simply because we barred future claims against the Multiple Injury Fund.” | 
__May11th2017.gif)
.gif)