Preserving and Asserting Second Injury Claims

The Second Injury Fund was created to encourage the hiring and retention in employment of handicapped employees who have a permanent, partial disability. The Second Injury Fund provides relief to employers and insurers from excess liability for compensation and medical benefits when a subsequent injury to such an employee merges with a preexisting permanent physical disability to cause a greater disability than would have resulted from the subsequent injury alone.

Written Claim Must be Filed

The employer or its insurer (whichever of them makes the payments or becomes liable) must file a written claim with the Second Injury Board providing such facts and information as may be required by the Board to determine whether the employer or insurer is qualified for reimbursement from the Second Injury Fund.

Time for Filing

As of September 9, 1988, a claim must be filed within one year (52 weeks) from the date of the first payment of any compensation or medical benefits.

Appeals from Second Injury Board Decisions

A party has 30 days from the receipt of written notice of an adverse decision by the Board to appeal. If an appeal is taken, the Second Injury Board shall be made a party defendant and a de novo trial shall be held.

Effective September 6, 1991, appeals are taken to the district court for the parish where the hearing was held or where the accident occurred, or if no hearing held or if the accident occurs out of state, the appeal may be taken to the 19th Judicial District Court, Parish of East Baton Rouge.

Requirements for Recovery

An employer must knowingly employ or knowingly retain in his employment an employee who has a permanent partial disability and the employee is injured in a subsequent accident at work which injury merges with the prior disability to create a greater disability than would have resulted from the job accident alone. (OBTAIN AND REVIEW PERSONNEL FILE).

Preexisting Permanent Partial Disability

A permanent partial disability for purposes of a Second Injury claim is a permanent condition, whether congenital or due to injury or disease, of such seriousness as to constitute a hindrance or obstacle to obtaining employment or to obtaining re-employment should the employee become unemployed.

1. Where the preexisting permanent partial disability is one of the 30 conditions listed in Section 1378(F) and the employer establishes that he had knowledge of that condition prior to the subsequent injury, there is a presumption that the employer considered the condition to be permanent and likely to be a hindrance or obstacle to employment.
2. Note that the list includes arthritis, ruptured intervertebral discs and a spinal fusion or surgical removal of an intervertebral disc.
3. Generalized knowledge of back complaints is insufficient.
4. The best procedure is to have the employee complete a medical history form inquiring about previous accidents, injuries or disabilities and to have the employee undergo a post-offer employment physical. Such inquiries are specifically allowed under Section 1208.1 and are required in order to take advantage of the forfeiture provisions of Section 1208.1 in which an employee can be denied all benefits if he fails to truthfully respond to questions about his previous injuries or medical condition. (Note- Inquiries must be post offer of employment so that the Americans with Disabilities Act is not violated.)

Subsequent Injuries

The employee with a permanent partial disability must incur a subsequent injury arising out of and in the course of his employment. This injury must occur prior to the employer's knowledge of the preexisting condition.

Merger

The merger of an injury with a preexisting permanent partial disability means that:

1. The subsequent injury would not have occurred but for the preexisting permanent partial disability, or
2. The disability resulting from the subsequent injury in conjunction with the preexisting permanent partial disability is materially and substantially greater than that which would have resulted had the preexisting permanent partial disability not been present and the employer has been required to pay and has paid compensation for that greater disability.
3. The merger does not necessarily have to involve an injury to the same parts of the body (e.g., a back disability can merge with mental retardation to cause a greater disability).

Compensation Benefits

For Accidents Between 07/01/83 and 10/01/85

1. Between July 1, 1983 and October 1, 1985, the Second Injury Fund did not reimburse temporary total disability benefits. The Fund reimbursed 60% of all required supplemental earnings benefits and permanent partial (schedule) benefits.
2. The Fund also reimbursed permanent total disability benefits paid in excess of the first 104 weeks of disability compensation.
3. The Fund reimbursed compensable death benefits after the first 175 weeks of payments. To obtain reimbursement for death benefits, the death could not have arisen solely from the compensable injury.

For Accidents On or After October 1, 1985

1. As of October 1, 1985, the Second Injury Fund is liable for reimbursement of all compensation payments whether these are for temporary total disability, permanent total disability, supplemental earnings benefits or permanent partial disability after the first 104 weeks of any such payments.
2. As of October 1, 1985, death benefits are reimbursable after the first 175 weeks of payments. The death must be caused by a combination of the preexisting condition and subsequent injury or would not have occurred but for the preexisting condition.

Medical Expenses

Pre-October 1, 1985

The 1983 Amendments provided for the reimbursement of medical expenses. The employer/insurer was entitled to 50% of the first $10,000 of medical expenses paid and, thereafter, the employer/insurer would be entitled to reimbursement of all medical expenses related to the job injury. For some time, the Fund took the position that there was no right of reimbursement for medical expenses if only temporary total disability benefits were paid. But see: Vinton v. Louisiana Workers Compensation Second Injury Board, 534 So.2d 1 1 9 (La. App. 3 Cir. 1988) holding that an employer who knowingly retains a worker with a preexisting permanent partial disability is entitled to be reimbursed for medical expenses while paying temporary total disability benefits. The accident in this case occurred before the October 1, 1985 Amendments.

Post-October 1, 1985

As of October 1, 1985, the employer or insurer is not reimbursed for the first $5, 000 of medical expenses incurred. After the expenditure of $5,000, the employer will be reimbursed for 50% of all expenses between $5,000 and $10,000. After the expenditure of $10,000, the employer will be reimbursed 100% of all reasonable and necessary medical expenses paid.

Workers' Compensation Settlements

Since TTD was not reimbursable during the "window\period between July 1, 1983 and October 1, 1985, that portion of a settlement attributable to TTD exposure was likewise not recoverable from the Fund. After the October 1, 1985 Amendments, all weekly benefits, including TTD, were recoverable. Compromise and lump sum settlements are specifically reimbursable under the 1988 Amendments to Section 1378.

The Second Injury Board has the option of reimbursing the settlement amount to the employer or insurer in one payment or in periodic three-month intervals until it has fully reimbursed the settlement amount.

For all accidents occurring on or after October 1, 1995. the employer or the insurer must obtain board approval for any workers' compensation settlement. Failure to do so will result in a forfeiture of the right of the employer to recover the settlement funds from the Second Injury Board.

Rehabilitation Expenses

These are not recoverable from the Second Injury Fund; Employers National Ins. Co. v. Second Injury Board, 540 So.2d 1094 (La. App. I Cir. 1989), writ denied, 546 So.2d 1219 (La. 1989).

Third-Party Settlements

The 1988 Amendments provide that the Second Injury Fund shall be credited for any amounts the employer or insurer receives from third parties. The employer or insurer is required to notify the Board of any subrogation action against third parties on any claims submitted to the Board.

1. Failure of the employer or insurer to notify the Board of any pending subrogation action prior to the receipt of payment from the Board shall subject the employer or the insurer to a penalty of 20% of the amount otherwise payable from the Second Injury Fund, as well as a return of all amounts paid by the Board to the extent such amounts are recovered in the subrogation action.
2. It is recommended that employers and insurers notify the Second Injury Board of any anticipated or pending third-party claims upon the filing of the Second Injury claim and immediately upon receipt of any funds pursuant to that third-party claim.

Payments under Federal Acts

The Second Injury Board is not liable for reimbursement of or required to give credit for any amounts paid as attorneys fees, penalties or sums paid under the Jones Act or Longshore and Harbor Worker's Compensation Act.

Certifying Reserves

La. R.S. 23:1378(A)(7) requires that insurers certify to the Board that medical reserves will be reduced to no more than $7,500 and that indemnity reserves will be reduced to no more than 104 weeks (175 weeks for death benefits) for all approved claims.