Second Injury Fund Claims in Louisiana Workers Compensation

Fullsizeoutput 3052

What Are Second Injury Fund Claims in Louisiana Workers Compensation? 

Louisiana's “Second Injury Fund” or “SIF” is a trust created by state law and administered by the State Second Injury Board (“SIB”) that is funded by payments from workers compensation insurance companies and self-insured employers.

The purpose of the Second Injury Fund is to persuade employers - who otherwise might worry about an increase in workers compensation insurance costs - to hire employees who have pre-existing conditions that constitute "permanent partial disabilities."

The Second Injury Fund accomplishes this by reimbursing some of the workers compensation benefits paid when an employee who has such a pre-existing condition suffers an injury at work and at the same time meets certain legal requirements.

Specifically, the Second Injury Fund legally requires that the workers compensation insurance company prove that:

    1. The employee has a preexisting condition constituting a “permanent partial disability;”
    2. The employer knew about the condition when the employee was hired or hired the employee after learning about the condition; and
    3. The preexisting permanent partial disability combines or merges with a disability caused by a compensable work injury to produce an overall disability that is materially and substantially greater than would have resulted from the work injury alone.

In other words, the Second Injury Fund rewards an employer for employing and retaining people who might otherwise be thought of as a liability risk, and thereby increases the employment opportunities for people with medical conditions that might otherwise discourage hiring and retaining by an employer.

Of course, the workers compensation insurance company that qualifies for reimbursement from the Second Injury Fund is not then relieved of its obligation to the injured worker. 

Instead, such a workers compensation insurance company must still pay full workers compensation benefits to the injured worker and then seek reimbursement from the Second Injury Fund for the workers compensation benefits paid to the employee.

The Second Injury Fund is financed by the workers compensation insurance companies, who make annual payments to the Second Injury Fund, according to assessment amounts - which is a percentage of the gross premium received by the insurer for writing workmen's compensation insurance in the preceding calendar year - as determined by the Second Injury Board.

The Second Injury Fund Process and Reimbursement Amounts

The Second Injury Fund is an administrative process, where the Second Injury Board either approves the reimbursement or denies it.

The Second Injury Board ("SIB") has forms that must be used, and usually, it is the workers compensation insurance company that submits the evidence and the completed forms to the SIB.

Second Injury Fund reimbursement under the following circumstances (where the word “injury” means the “second injury” or the injury initiating the payment of compensation benefits):

    1. Injury before July 1, 2004: Second Injury Fund relief for indemnity payments after employer/insurer has paid 104 weeks. Medical benefits are reimbursed at the rate of 50% for amounts between $5,000 and $10,000, then 100% for amounts of $10,000 and above. In most cases, this will work out to 100% reimbursement for medicals over $7,500.
    2. Injury on or after July 1, 2004, but before July 1, 2009: Second Injury Fund relief for comp or indemnity payments after the employer/insurer has paid 130 weeks. Medical benefits are 100% reimbursed for amounts of $25,000 and above.
    3. Injury on or after July 1, 2009, but before July 1, 2010: Second Injury Fund relief for comp or indemnity payments after employer/insurer has paid 104 weeks. Medical benefits are reimbursed at the rate of 50% for amounts between $5,000 and $10,000, then 100% for amounts of $10,000 and above. In most cases, this will work out to 100% reimbursement for medicals over $7,500.
    4. Injury on or after July 1, 2010: Second Injury Fund relief for comp or indemnity payments after employer/insurer has paid 104 weeks. Medical benefits are reimbursed at the rate of 100% for amounts of $25,000 and above, including reasonable and necessary Vocational Rehabilitation expenses directly related to actual retention or reemployment.

The “One Year from First Payment” Rule

It is not a good idea for the employer or the workers compensation insurance company to “wait and see” before considering Second Injury Fund relief until it gets a better idea of how much will be spent on medical expenses and how many weeks of indemnity will ultimately be paid.

This because the Second Injury Fund regulations state:

  • Within one year after the first payment of either compensation or medical benefits, the employer or his insurer, whichever of them makes the payments or becomes liable therefor, shall notify the board in writing of such facts and furnish such other information as may be required for the board to determine if the employer or his insurer is entitled to reimbursement from the Workers' Compensation Second Injury Fund.
  • No employer, insurer, servicing agent, or self-insured association shall be reimbursed unless the board is notified within one year from the date of the first payment of either compensation or medical benefits.

Thus, the employer or the workers compensation insurance company should begin as the first steps of adjusting the claim an examination as to:

  • Whether the employee had a preexisting permanent partial disability;
  • Whether there was employer knowledge; and
  • Whether there is evidence sufficient for a merger.

In other words, if the workers compensation insurance company investigates the claim and finds that there is a reasonable basis for believing that the three elements for Second Injury Fund relief could exist and that there is any reasonable chance that the claim may involve enough medicals expenses over $25,000 and/or indemnity beyond 104 weeks to make a Second Injury Fund claim cost-effective, then the administrative claim should be put together as soon as practicable and timely filed with the Second Injury Fund. 

Of course, one big problem can occur when the medical evidence did not indicate a reasonable basis to assert merger until over 12 months after the first payment, so the workers compensation insurance company should always look for a basis for Second Injury Fund relief, do it early, and, when in doubt, file with the Second Injury Board.

Pre-Requisites for Reimbursement in Second Injury Fund Claims Louisiana Workers Compensation

An employer who knowingly employs, re-employs, or retains an employee who has a permanent partial disability will qualify for reimbursement from the Second Injury Fund, if the employee incurs a subsequent injury arising out of and in the course of his employment resulting in a greater liability due to the merger of the subsequent injury with the preexisting permanent partial disability.

Accordingly, the pre-requisites for reimbursement in a Second Injury Fund claim are as follows:

    • The employee must have a pre-existing permanent partial disability (as listed and defined under Louisiana law) that is an obstacle or hindrance in obtaining employment;
    • The employer must establish that it had actual knowledge of the employee's pre-existing permanent partial disability before the subsequent injury;
    • The employee must sustain a subsequent (occupational) injury that results in workers compensation benefits being paid;
    • The subsequent injury would not have occurred but for the pre-existing permanent partial disability, or the disability is greater than would have resulted had the pre-existing permanent disability not been present, and the employer or its insurer had been required to pay compensation for the greater disability; and
    • The employer or its insurer must file a Notice of Claim form within 52 weeks after the first payment of any benefit (indemnity or medical) by mailing, faxing, or emailing the form to the Second Injury Board.

The Employer's Actual Knowledge of the Pre-existing Disability

An employer who “knowingly employs or knowingly retains in his employment” an employee who suffers from a permanent partial disability as defined by Louisiana law is entitled to be reimbursed from the Second Injury Fund if that employee incurs a subsequent injury (arising out of and in the course of his employment) which results in liability due to the “merger” of the subsequent injury with the pre-existing permanent partial disability.

The emphasis on “knowing” employment or retention in employment is important, given that the stated purpose of the Second Injury Fund is to encourage the employment and retention of handicapped persons.

If fact, Louisiana law specifically states that "no employer or insurer shall be entitled to reimbursement unless it is clearly established that the employer had actual knowledge of the employee's pre-existing permanent partial disability before the subsequent injury."

When the employer learns of the pre-existing partial disability after the employee is hired but before the “second injury,” the requirement of “knowing” employment is satisfied.

But if the employer has only general knowledge of certain symptoms, the requirement of “knowing” employment is likely not satisfied, since the employer or its insurer likely cannot show actual knowledge of the pre-existing partial disability itself.

Pre-existing Permanent Partial Disability in Second Injury Fund Claims Louisiana Workers Compensation

For purposes of a Second Injury Fund claim, a pre-existing permanent partial disability is any permanent condition, whether congenital or due to injury or disease that constitutes a hindrance or obstacle to obtaining employment or to obtaining reemployment if the employee should become unemployed.

Assuming that the employer can prove that it knew about the pre-existing permanent partial disability before the subsequent injury, the following 34 conditions will be presumed to be a hindrance or obstacle to employment in a Second Injury Fund claim:

    1. Seizure disorder.
    2. Diabetes mellitus.
    3. Coronary artery disease or congestive heart failure.
    4. Arthritis.
    5. Amputated foot, leg, arm, or hand, or total or partial of at least fifty percent loss of use thereof.
    6. Loss of sight of one or both eyes or legal blindness.
    7. Residual disability from poliomyelitis.
    8. Cerebral palsy.
    9. Multiple sclerosis.
    10. Parkinson's disease.
    11. Cerebral vascular accident.
    12. Tuberculosis.
    13. Pneumoconiosis.
    14. Psychoneurosis or psychosis following treatment in a recognized medical or mental institution.
    15. Bleeding disorder.
    16. Chronic osteomyelitis.
    17. Ankylosis of joints.
    18. Muscular dystrophy.
    19. Arteriosclerosis.
    20. Thrombophlebitis.
    21. Varicose veins.
    22. Heavy metal poisoning.
    23. Ionizing radiation injury.
    24. Compressed air sequelae.
    25. Ruptured or herniated intervertebral disc.
    26. Brain damage.
    27. Spinal surgery, including fusion, partial, or total discectomy or microdiscectomy.
    28. Chronic obstructive pulmonary disease (COPD).
    29. Post traumatic stress disorder syndrome (PTSD).
    30. Post-concussive syndrome.
    31. Alzheimer's disease.
    32. Sickle cell anemia.
    33. Joint replacement surgery.
    34. Intellectual disability:

(a) Provided the diagnosis of an intellectual disability shall be made on the basis of the following:

(i) Significantly subnormal intellectual functioning, defined as an objective measure of cognitive status, which falls at least two standard deviations below the mean of the national standardization sample based on valid results of a recognized individually administered test of intellectual function.

(ii) Objective evidence of concurrent impairment of adaptive functioning in at least two areas of functional behavior as measured by standardized, norm reference measures of adaptive function.

(iii) Evidence of an onset before the age of eighteen years.

(b) It shall not be necessary for the employer to know the employee's actual intelligence quotient or actual relative ranking in relation to the intelligence quotient of the general population.

(c) Diagnosis of an intellectual disability shall be made by a psychiatrist, psychologist, or other person properly licensed and certified to make such a diagnosis. 

However, a medical condition that is not listed in these 34 conditions may still qualify as a permanent partial disability if the workers compensation insurance company can show that the employee had a permanent condition of such seriousness as to constitute a hindrance or obstacle to his obtaining employment, to retention by an employer, or to obtaining re-employment should the employee become unemployed.  

Mergers in Second Injury Fund Claims Louisiana Workers Compensation

For purposes of a Second Injury Fund claim, the term “merger” is defined as either a specific new aggravation of a previous condition or a new condition which combines with a previous condition to create a materially greater disability than that which would have resulted had the preexisting permanent partial disability not been present.

In other words, a merger occurs when the disabilities combine to make the employee materially and substantially more disabled than if the employee suffered from the second injury alone.

Louisiana law provides that the merger of an injury with a preexisting permanent partial disability is limited to the following:

    1. The subsequent injury would not have occurred but for the pre-existing permanent partial disability; or
    2. The disability resulting from the subsequent injury in conjunction with the pre-existing permanent partial disability is materially and substantially greater than that which would have resulted had the pre-existing permanent partial disability not been present, and the employer had been required to pay and has paid compensation for the greater disability.

For example, if an employee with sight in only one eye loses the use of his other eye in a second injury, the resulting disability is materially and substantially greater than the disability, which would have resulted had the pre-existing permanent partial disability not been present.

However, the term merger probably does not include the situation in which the subsequent injury does not cause greater disability because of the preexisting condition than would have been the case absent the preexisting condition.

So if an employee with sight in only one eye suffers loss of both legs and is totally and permanently disabled, the second injury would have resulted in total and permanent disability without regard to the existence of the permanent partial disability prior to that injury, and the Second Injury Fund reimbursement will not likely occur. 

Second Injury Fund Appeals in Louisiana Workers Compensation

Denials of Second Injury Fund relief by the Second Injury Board can be appealed.

Such appeals of Second Injury Board determinations need to be filed in the 19th Judicial District Court for Parish of East Baton Rouge, and all appeals in all such cases shall be tried de novo (or anew, meaning that the court will hear the appeal as if it were a new case or trial).

An appeal of a Second Injury Board determination must be filed within 30 days after the date of the decision of the board.

Once an appeal to the district court is filed by a workers compensation insurance company seeking Second Injury Fund relief, the defense of the case is assigned to attorneys with the State Attorney General's office who work for the Second Injury Board.

Because the appeal is de novo, evidence is often developed that was not before the Second Injury Board on its initial consideration, such as physician testimony on a pre-existing condition or merger, or employer knowledge evidence from depositions.

Given that the Second Injury Fund is a trust funded by insurers and self-insured employers, if evidence is developed that appears to the Second Injury Board attorney to indicate that the elements for Second Injury Fund relief are present, the matter will often be presented to the Second Injury Board for reconsideration rather than going straight through the district court process.

Appeals from trial court decisions on Second Injury Fund relief are to the Louisiana First Circuit Court of Appeal, and appeals from the First Circuit Court of Appeal can be heard by the Louisiana Supreme Court at its own discretion.

The Louisiana Statutes for Second Injury Board Claims in Louisiana Workers Compensation

The primary Louisiana statutes regarding third-party claim in workers compensation are La. R.S. 23:1371, La. R.S. 23:1371.1, La. R.S. 23:1372, La. R.S. 23:1373, La. R.S. 23:1374, La. R.S. 23:1375, La. R.S. 23:1376, La. R.S. 23:1377, and La. R.S. 23:1378, which read as follows:

§1371.  Purpose and intent

A.  It is the purpose of this Part to:

(1)  Encourage the employment, re-employment, or retention of employees who have a permanent, partial disability.

(2)  Protect employers, group self-insurance funds, and property and casualty insurers from excess liability for workers' compensation for disability when a subsequent injury to such an employee merges with his preexisting permanent physical disability to cause a greater disability than would have resulted from the subsequent injury alone.

B.  Except as provided in R.S. 23:1378(A)(6), this Part shall not be construed to create, provide, diminish, or affect in any way the workers' compensation benefits due to an injured employee.  The payment of compensation to an injured employee under this Chapter shall be determined without regard to this Part, and the provisions of this Part shall be considered only in determining whether an employer or his insurer is entitled to reimbursement from the Workers' Compensation Second Injury Fund herein created.

C. As used in this part, the merger of an injury with a preexisting permanent partial disability is limited to the following:

(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 additional medical or indemnity benefits for that greater disability.

D.  The records of the second injury board shall be confidential as provided in R.S. 23:1293(A).

Added by Acts 1974, No. 165, §1.  Amended by Acts 1977, No. 267, §1, eff. Oct. 1, 1977; Acts 1983, 1st Ex. Sess., No. 1, §6; Acts 1995, No. 188, §1, eff. June 12, 1995; Acts 1995, No. 245, §1, eff. June 14, 1995; Acts 2006, No. 453, §1, eff. June 15, 2006; Acts 2010, No. 799, §1, eff. June 30, 2010.

§1371.1.  Definitions

As used in this Part, unless the context clearly indicates otherwise, the following terms shall have the meanings ascribed to them in this Section:

(1)  "Employer" means any entity who is required to pay and has paid into the fund.

(2)  "Hire and fire authority" shall mean the authority of the representative of the employer who plays an integral part in fulfilling the business of the employer with the responsibility to have closely controlled the injured employee regarding his physical conduct and time, as well as providing significant input into the hiring, retention, and firing decisions regarding that employee.

(3)  "Permanent partial disability" shall mean any permanent condition, whether congenital or due to injury or disease, of such seriousness as to constitute a hindrance or obstacle to obtaining employment, to retention by an employer, or to obtaining re-employment, if the employee becomes unemployed.

(4)  "PPD Employee Registry" shall mean the registry maintained by the Louisiana Workforce Commission of available employees.  The listing of an employee on the registry shall serve as proof of knowledge of the employee's preexisting permanent partial disability for the purpose of a Second Injury Board claim.

(5)  "Psychiatrist" shall mean an individual licensed to practice medicine by the Louisiana State Board of Medical Examiners or, in the event that the individual is practicing medicine in a jurisdiction other than Louisiana, licensed by the appropriate member board of the Federation of State Medical Boards to practice psychiatry, who has completed a residency in psychiatry, been in clinical practice for at least three years and has training in the evaluation, diagnosis, and treatment of intellectual disabilities.

(6)  "Psychologist" shall mean an individual licensed to practice psychology by the Louisiana State Board of Examiners of Psychologists or licensed to practice medical psychology by the Louisiana State Board of Medical Examiners, or, in the event an individual is practicing psychology in a jurisdiction other than Louisiana, licensed by the appropriate member board of the Association of State and Provincial Psychology Boards to practice psychology, who has registered specialty in a relevant clinical area of practice, who has been in clinical practice for at least three years and has training and experience in the evaluation, diagnosis, and treatment of intellectual disabilities.

(7)  "Representative" shall include, but not be limited to, third party administrators, attorneys, or adjusting firms of the party filing the claim on behalf of the employer, insurer or group self-insurance fund.

Acts 2006, No. 453, §1, eff. June 15, 2006; Acts 2009, No. 251, §6, eff. Jan. 1, 2010; Acts 2010, No. 799, §1, eff. June 30, 2010; Acts 2014, No. 811, §12, eff. June 23, 2014.

§1372. Louisiana Workers' Compensation Second Injury Board; creation, domicile, membership

The Louisiana Workers' Compensation Second Injury Board, hereinafter referred to as the board, is created. The board, which shall be domiciled in Baton Rouge, Louisiana, shall be composed of five members or their designee, who shall be the secretary of state, the state treasurer, the commissioner of insurance, the secretary of the Department of Children and Family Services, and the assistant secretary of the office of workers' compensation administration.

Acts 1988, No. 997, §1; Acts 2006, No. 453, §1, eff. June 15, 2006.

§1373.  Meetings; quorum; officers

A.  The board may meet monthly, but in no event shall it meet less than once each three months and at such other times as it may provide by its rules.  Three members shall constitute a quorum for the transaction of business.  A majority vote of the members present shall be required for all actions of the board.  Any member of the board may be represented at any meeting by an alternate designated by the member in writing prior to the commencement of such meeting.

B.  The board shall elect a chairman and vice chairman, who shall serve for a two year term; provided that the election be held within thirty days of July 1, of each odd-numbered year.

Added by Acts 1974, No. 165, §1.  Amended by Acts 1977, No. 235, §1, eff. July 5, 1977; Acts 2010, No. 799, §1, eff. June 30, 2010.

§1374.  Salary; expenses

The members of the board shall receive no salary, but each member shall be reimbursed for necessary travel and other expenses actually incurred while in attendance at meetings of the board or on business for the board.

Added by Acts 1974, No. 165, §1.

§1375. Personnel

A. The board shall appoint, fix the compensation and prescribe the duties of an executive director, who shall be in the unclassified service. The executive director shall devote full time to his duties and may not accept or engage in additional employment of any kind.

B. The executive director shall employ and supervise all such personnel, who shall be in the classified service, necessary for the operation of the business of the board.

Added by Acts 1974, No. 165, §1; Acts 2006, No. 453, §1, eff. June 15, 2006.

§1376.  Rule making power; reports

A.  The board may conduct such investigations, hold such hearings and adopt such rules and regulations as are necessary and proper to carry out its functions.

B.  The board may collect information and compile statistics relevant and pertinent to the administration of the second injury fund.  In order to accomplish this purpose, it may require employers and insurers to file reports with it containing such information and details as the board prescribes with respect to occupational accidents and workers' compensation claims.

Added by Acts 1974, No. 165, §1.  Acts 1983, 1st Ex. Sess., No. 1, §6.

§1377. Workers' Compensation Second Injury Fund

A. There is hereby created and established in the state treasury a special fund which shall be designated as the "Workers' Compensation Second Injury Fund", hereinafter referred to as the "fund". The fund shall be maintained as a separate account in the state treasury for the purposes of funding the administrative expenses of the board and reimbursing compensable claims of property and casualty insurers, self-insured employers, and group self-insurance funds as set forth by R.S. 23:1371 et seq. Except as provided in Subsection F of this Section, monies shall be withdrawn therefrom only pursuant to legislative appropriation and shall be subject to budgetary control as provided by law. All remaining and unencumbered balances at the end of any fiscal year shall remain credited to the fund and shall be used solely for the purposes stated in this Section. Any interest income generated by the fund shall accrue to the fund.

B.(1) Every property and casualty insurer, individual self-insurer, and group self-insurance fund that has paid Louisiana workers' compensation benefits under Parts II and III, Chapter 10 of this Title, shall make an annual payment to the fund. The annual reports required by R.S. 23:1291.1(A) shall be used by the board as the base figure for computing the assessments and such assessments shall be a percentage of the amount reported in the annual reports. The board shall determine the amount of the assessment. Monies collected by the assessment shall not exceed one hundred twenty-five percent of the sum of the disbursements made from the fund in the preceding fiscal year, and the known outstanding unpaid amounts which have been submitted for reimbursement on or in connection with an approved claim at the end of the preceding fiscal year.

(2) These funds shall be made payable to the order of the state treasurer and shall be transmitted to the board, which shall in turn transmit all funds so received to the state treasurer. Upon receipt by the state treasurer, the funds shall be credited to the Workers' Compensation Second Injury Fund.

C.(1) The board shall provide by rules and regulations for the collection of the assessment amount. The board shall determine the date the assessment is due and notify, in writing, all property and casualty insurers, self-insured employers, and group self-insurance funds of the assessment at least thirty days before the due date. If such amounts are not paid by the due date established by the board, there may be assessed, for each thirty days that the amount assessed remains unpaid, a civil penalty equal to twenty percent of the amount assessed that remains unpaid, which shall be due and collected at the same time as the unpaid part of the amount assessed. Payments received by the office shall be applied first to penalties assessed and then to the outstanding assessment.

(2) Any property and casualty insurer that has discontinued writing workers' compensation insurance in this state or any self-insured employer that ceases to be authorized by R.S. 23:1168 or any group self-insurance fund that has ceased to be authorized as a group self-insurance fund shall continue to be liable for payment of any assessment and penalties to the fund on account of any benefits paid by the property and casualty insurer, self-insured employer, or group self-insurance fund under Parts II and III of this Chapter.

(3) Any entity that is required by law to make an annual payment or payments into the fund and has not done so shall not be eligible for reimbursement from the fund. In addition, except as provided in R.S. 23:1378(A)(5), any entity that is not required by law to make such payments into the fund shall not be eligible for reimbursement from the fund.

D.(1) Upon warrant issued by the board, the treasurer shall make payments to employers or insurers entitled thereto under the provisions of this Part. If the funds in the Workers' Compensation Second Injury Fund are insufficient to pay such warrants, claims shall rank from the date of submission to the second injury board for reimbursement.

(2) A final decision of the board, as provided in R.S. 23:1378(E), decreeing that an employer or insurer is entitled to an award from the Workers' Compensation Second Injury Fund shall have the same effect as such a warrant.

E. If any property or casualty insurer, self-insured employer, or group self-insurance fund fails to pay the amounts assessed against it under the provisions of this Section within sixty days from the time such notice is served upon it, the commissioner of insurance may suspend or revoke the authorization to transact business as provided by law or the office of workers' compensation may suspend or revoke the authorization to be self-insured.

F. The board may enter into reimbursement agreements, at the recommendation of the secretary, with property and casualty insurers, self-insured employers, or group self-insurance funds which have made an overpayment to the fund.

G. The Second Injury Board may approve an annual lump-sum amount up to one percent of the board's annual budget to be allocated to Louisiana Rehabilitation Services for use in assisting potential employers and qualified employees with permanent partial disabilities under the Louisiana Rehabilitation Services Vocational Rehabilitation Program. Services may include work evaluation and job readiness services, assessment for and provision of assistive technology, and workstation modification directly related to the employment, reemployment, or retention of such employees. The funds paid by the Second Injury Board, as well as any fund matching and earned interest, shall be used only for these purposes. The Louisiana Rehabilitation Services shall provide the Second Injury Board with a quarterly report to include all funding balances and expenditures as well as case statistical information.

Acts 1974, No. 165, §1; Acts 1983, 1st Ex. Sess., No. 1, §6; Acts 1985, No. 697, §1, eff. Oct. 1, 1985; Acts 1988, No. 997, §1; Acts 1990, No. 63, §1; Acts 1992, No. 862, §1; Acts 1995, No. 188, §1, eff. June 12, 1995; Acts 2005, No. 257, §1; Acts 2006, No. 453, §1, eff. June 15, 2006; Acts 2010, No. 799, §1, eff. June 30, 2010; Acts 2011, No. 291, §1.

§1378. Determination of liability of fund

A. An employer operating under the provisions of this Chapter who knowingly employs, re-employs, or retains in his employment an employee who has a permanent partial disability, as defined in R.S. 23:1371.1, shall qualify for reimbursement from the Second Injury Fund, if the employee incurs a subsequent injury arising out of and in the course of his employment resulting in a greater liability due to the merger of the subsequent injury with the preexisting permanent partial disability. The employer or, if insured, his insurer shall pay all benefits provided in this Chapter, but the employer or, if insured, his insurer thereafter shall be reimbursed by the Second Injury Fund for all indemnity and medical benefit payments as follows:

Date of Injury

Reimbursement Schedule

Before July 1, 2004 & on/

after July 1, 2009, but before July 1, 2010

INDEMNITY

•    TTD/SEB/PTD After the first 104 weeks of payment of benefits

•    Death benefits after the first 175 weeks of payment of benefits

MEDICAL

•    50% of all reasonable and necessary medical expenses actually paid which exceed $5,000.00, but no less than $10,000.00

•    100% of all reasonable and necessary medical expenses actually paid which exceed $10,000.00

On/after July 1, 2004 & before July 1, 2009

INDEMNITY

•    After the first 130 weeks of payment of benefits


MEDICAL

•    100% of all reasonable and necessary medical expenses actually paid which exceed $25,000.00

•    

On/after July 1, 2010

INDEMNITY

•    After the first 104 weeks of indemnity


MEDICAL

•    100% of all reasonable and necessary medical expenses actually paid which exceed $25,000.00, including reasonable and necessary Vocational Rehabilitation expenses, if such expenses are directly related to services provided in the actual retention or reemployment of employees

(1) Such payments shall be reimbursed provided they are submitted to the board within one year of the approval for reimbursement or within one year of the payment of such weekly compensation payments, whichever occurs later.

(2) No employer or insurer shall be entitled to reimbursement unless it is clearly established that the employer had actual knowledge of the employee's preexisting permanent partial disability prior to the subsequent injury. For injuries occurring after December 31, 2010, actual knowledge shall be established only by any one of the following circumstances:

(a) The employee's preexisting permanent partial disability was caused by a compensable workers' compensation accident or occupational disease while employed by the same employer seeking reimbursement from the Second Injury Fund.

(b) Prior to the second injury, the employee disclosed to the employer the employee's preexisting permanent partial disability on a form promulgated by the office of workers' compensation.

(c) The employer employs, retains, or re-employs employees from the PPD employee registry maintained by the Louisiana Workforce Commission and which is created and maintained in accordance with rules promulgated by the office of workers' compensation.

(d) The employer provides an affidavit, on a form promulgated by the office of workers' compensation, which shall set forth all of the following:

(i) An attestation as to hire and fire authority as defined in R.S. 23:1371.1.

(ii) An attestation as to how and when knowledge was acquired.

(iii) An attestation as to the actual permanent partial disability existing.

(iv) An attestation of how the permanent partial disability, if not a presumed condition as listed in Subsection F of this Section, was a hindrance and obstacle to employment.

(v) An attestation certifying that false statements used in the affidavit may result in penalties pursuant to R.S. 23:1208.

(3) The Second Injury Fund shall be credited or reimbursed for sums recovered by the employer or the insurer from third parties in an amount equal to a pro rata share of the net amount recovered based upon the amounts paid by the fund, and the amounts paid by the self-insurer or insurer which have not been reimbursed by the fund, to or on behalf of the injured employee for medical benefits, workers' compensation indemnity benefits, and vocational rehabilitation services. The employer or the insurer shall advise the board of any subrogation action against third parties on any claim submitted to the board. The failure of the employer or insurer to notify the board of any pending subrogation action prior to receipt of payment from the board shall subject the employer or the insurer to a penalty of twenty percent of the amount otherwise claimed by the employer or insurer as payable from the Second Injury Fund, as well as a return of all amounts paid by the board to the extent these amounts are recovered in the subrogation action. Except as provided in this Subsection the Second Injury Fund shall not be required to reimburse vocational rehabilitation expenses.

(4)(a) The Second Injury Fund shall not be liable for reimbursement or be obligated to give credit for any amounts paid by an employer or carrier as attorney fees, penalties, or interest, nor for any sums paid under the Jones Act or Longshoremen and Harbor Workers Compensation Act.

(b) For settlements occurring after July 1, 2007, the Second Injury Fund shall be liable for reimbursement or be obligated to give credit for attorney fees paid pursuant to R.S. 23:1141, but shall not be liable for reimbursement or be obligated to give credit for attorney fees paid pursuant to R.S. 23:1201 or any other penalty provision provided for in Chapter 10 of this Title.

(5) Upon the board's approval of a claim for reimbursement, and on an annual basis thereafter, the insurer shall report to the board an estimate of the future medical and indemnity liability to the injured employee on a form promulgated by the assistant secretary. The report shall be submitted to the board each year at the same time the annual report required by R.S. 23:1291.1 is submitted to the office of workers' compensation administration.

(a) Upon the board's approval of a claim for reimbursement, the insurer shall immediately certify to the board that the medical reserve and the weekly disability benefits (indemnity) reserve do not exceed the threshold limits provided in the reimbursement schedule set forth in this Subsection. No reimbursement will be made to the insurer unless such insurer complies with the provisions of this Paragraph:

(i) As a prerequisite to reimbursement from the fund, the insurer shall be required to certify that the medical and indemnity reserves have been reduced to the threshold limits of reimbursement and report in accordance with the National Council on Compensation Insurance Workers' Compensation Statistical Plan.

(ii) The Second Injury Fund director shall quarterly submit to the National Council on Compensation Insurance information regarding the Second Injury Fund accepted claims.

(iii) The National Council on Compensation Insurance shall submit a report of any discrepancies pursuant to regulations established by the Department of Insurance. The Department of Insurance is directed to establish regulations concerning Second Injury Fund discrepancies.

(b) The Louisiana Insurance Guaranty Association shall be entitled to reimbursement, but only to the extent of the proportion of the Second Injury Fund assessment paid by insurance companies.

(6)(a)(i) For an accident occurring on or after October 1, 1995, the employer, if self-insured, or the insurer shall obtain written approval from the board of any lump sum or compromise settlement of an approved claim before such settlement is submitted for approval, as provided in Part III of this Chapter.

(ii) If written approval is obtained, an order approving the settlement shall be obtained within one hundred eighty days from the date that approval is issued after which time the written approval shall be null and the self-insurer or insurer must again obtain written approval to settle the claim. The board shall respond to requests for written approval within forty-five days of receipt of the request.

(iii) If an employer, if self-insured, or the insurer seeks authority to enter into a compromise settlement in connection with the settlement of a third-party claim, the board shall respond within three working days unless the settlement contemplates payment by the insurer or self-insurer of additional amounts which exceed fifty thousand dollars. If the settlement contemplates additional amounts which exceed fifty thousand dollars, the board shall respond within forty-five days of receipt of the request.

(iv) If the board does not issue a written response within the time provided in Items (ii) and (iii), the request shall be deemed approved unless the employer or insurer does not comply with rules promulgated pursuant to Item (v) of this Paragraph.

(v) The assistant secretary of the Office of Workers' Compensation Administration shall establish and promulgate, in accordance with the Administrative Procedure Act, such rules and regulations governing the submission of requests for approval as well as response from the board as may be deemed necessary and which are not inconsistent with the laws of this state.

(b)(i) Except in cases of a settlement in connection with the settlement of a third-party claim, if the self-insurer or insurer fails to obtain written approval from the board as provided in Subparagraph (a) of this Paragraph or fails to submit the settlement to the judge for approval as provided in Subparagraph (a) of this Paragraph, the fund shall not reimburse such self-insurer or insurer for the final settlement amount.

(ii) In cases of a settlement in connection with the settlement of a third-party claim, if the self-insurer or insurer fails to obtain written approval from the board as provided in Subparagraph (a) of this Paragraph or fails to submit the settlement to the judge for approval as provided in Subparagraph (a) of this Paragraph, the fund shall not reimburse such self-insurer or insurer for the final settlement amount and twenty-five percent of the unpaid reimbursements due or ten thousand dollars, whichever is greater.

(iii) As used in this Section, "final settlement amount" shall mean only additional funds contemplated to be paid by the insurer or self-insurer.

(c) The board shall not be a party to any lump sum compromise settlement with the employee.

(d) In the event that the board issues a written denial of the settlement, the property or casualty insurer, self-insured employer, or group self-insurance fund may appeal pursuant to Subsection E of this Section. The appeal shall be placed on the preference docket of the appropriate district court and shall be heard on the earliest practicable date.

B.(1) Except as provided in Paragraph (2) of this Subsection, the employer or his insurer, whichever of them makes the payments or becomes liable, shall within one year after the first payment of either compensation or medical benefits, whichever occurs first, notify the board in writing of such facts and furnish such other information as may be required by the board to determine if the employer or his insurer is qualified for reimbursement from the Workers' Compensation Second Injury Fund. Except as provided in Paragraph (2) of this Subsection, no employer, insurer, servicing agent, or self-insured association shall be reimbursed unless the board is notified within one year from the date of the first payment of either compensation or medical benefits whichever occurs first. Employers which are self-insured for workers' compensation benefits, but have not received a certificate of authority from the commissioner of insurance as provided for in R.S. 23:1197 or authorization from the assistant secretary pursuant to R.S. 23:1168(A)(2) or (3) shall not be entitled to reimbursement from the fund.

(2) When R.S. 23:1209(A)(3) is applicable to a claim against an employer, the employer or his insurer, whichever of them makes the payments or becomes liable, shall within one year after the first payment of either compensation or medical benefits, whichever occurs later, notify the board in writing of such facts and furnish such other information as may be required by the board to determine if the employer or his insurer is qualified for reimbursement from the Workers' Compensation Second Injury Fund.

C.(1) Upon receipt of a notice as provided in Subsection B of this Section, the board may conduct an investigation into all phases of the matter and take any and all other actions necessary to permit it to determine whether or not the employer or his insurer is entitled to reimbursement from the Workers' Compensation Second Injury Fund.

(2) The board may call a hearing, and in such case the employer and insurer, if any, shall be notified of the date, time, and place at least ten days before the date set for the hearing. Hearings may be had in the parish wherein the accident occurred or in any other parish that the board determines to be more convenient. The board shall establish rules for the conduct of such hearings. The board may issue subpoenas for witnesses in its behalf or for witnesses deemed necessary to a proper determination of the case. It shall issue subpoenas for witnesses at the request of the employer or insurer. At such hearings, the board shall not make a determination which would create, provide, diminish, or affect any workers' compensation benefits due to an injured employee but shall limit itself to the determination of whether the fund is liable to reimburse the employer, or, if insured, the insurer.

D. If the board finds that the employer or, if insured, his insurer is entitled to reimbursement, as provided in this Part, from the Workers' Compensation Second Injury Fund, the board shall issue its warrant to the state treasurer for payments to be made at such intervals as the board directs from the Workers' Compensation Second Injury Fund to such employer or insurer for the amount provided in Subsection A of this Section. In the event the employer or insurer makes a compromise or a lump-sum payment as provided in R.S. 23:1271 through 1274, the board shall have the discretion of paying in a lump sum or in periodic payments of three-month intervals for the amount that would have been due the employee for that period from the date the compromise or lump-sum settlement agreement is received in the board's office.

E. Written notice of the decision of the board shall be given to all parties to the hearing and the representatives designated by the party on the reimbursement form submitted to the board. The decision of the board shall be final; however, an appeal therefrom may be taken by any of the parties within thirty days after the date of the decision of the board. If an appeal is taken, the board shall be made party defendant, and service and citation shall be made in accordance with applicable law upon the attorney general or one of his assistants. The appeal shall be to the Nineteenth Judicial District Court, parish of East Baton Rouge. All appeals in all such cases shall be tried de novo.

F. Where the employer establishes that he had knowledge of the preexisting permanent partial disability prior to the subsequent injury, and diagnosis of the condition was made by qualified physicians within the scope of their practice or other persons properly licensed and certified to make such a diagnosis, there shall be a presumption that the employer considered the condition to be permanent and to be or likely to be a hindrance or obstacle to employment where the condition is one of the following:

            (1) Seizure disorder.

            (2) Diabetes mellitus.

            (3) Coronary artery disease or congestive heart failure.

            (4) Arthritis.

            (5) Amputated foot, leg, arm, or hand, or total or partial of at least fifty percent loss of use thereof.

            (6) Loss of sight of one or both eyes or legal blindness.

            (7) Residual disability from poliomyelitis.

            (8) Cerebral palsy.

            (9) Multiple sclerosis.

            (10) Parkinson's disease.

            (11) Cerebral vascular accident.

            (12) Tuberculosis.

            (13) Pneumoconiosis.

            (14) Psychoneurosis or psychosis following treatment in a recognized medical or mental institution.

            (15) Bleeding disorder.

            (16) Chronic osteomyelitis.

            (17) Ankylosis of joints.

            (18) Muscular dystrophy.

            (19) Arteriosclerosis.

            (20) Thrombophlebitis.

            (21) Varicose veins.

            (22) Heavy metal poisoning.

            (23) Ionizing radiation injury.

            (24) Compressed air sequelae.

            (25) Ruptured or herniated intervertebral disc.

            (26) Brain damage.

            (27) Spinal surgery including fusion, partial, or total discectomy or microdiscectomy.

            (28) Chronic obstructive pulmonary disease (COPD).

            (29) Post traumatic stress disorder syndrome (PTSD).

            (30) Post concussive syndrome.

            (31) Alzheimer's disease.

            (32) Sickle cell anemia.

            (33) Joint replacement surgery.

            (34) Intellectual disability,

(a) Provided the diagnosis of an intellectual disability shall be made on the basis of the following:

(i) Significantly subnormal intellectual functioning, defined as an objective measure of cognitive status which falls at least two standard deviations below the mean of the national standardization sample based on valid results of a recognized individually administered test of intellectual function.

(ii) Objective evidence of concurrent impairment of adaptive functioning in at least two areas of functional behavior as measured by standardized, norm reference measures of adaptive function.

(iii) Evidence of an onset before the age of eighteen years.

(b) It shall not be necessary for the employer to know the employee's actual intelligence quotient or actual relative ranking in relation to the intelligence quotient of the general population.

(c) Diagnosis of an intellectual disability shall be made by a psychiatrist, psychologist, or other person properly licensed and certified to make such a diagnosis.

Acts 1974, No. 165, §1; Acts 1976, No. 267, §2, eff. Oct. 1, 1977; Acts 1976, No. 298, §1; Acts 1976, No. 299, §§1, 2; Acts 1977, No. 267, §§2, 3, eff. Oct. 1, 1977; Acts 1976, No. 50, §1; Acts 1983, 1st Ex. Sess., No. 1, §§1, 6, eff. July 1, 1983; Acts 1985, No. 697, §1, eff. Oct. 1, 1985; Acts 1988, No. 938, §1, eff. July 1, 1989; Acts 1988, No. 997, §1; Acts 1989, No. 23, §1, eff. June 15, 1989; Acts 1989, No. 260, §1, eff. Jan. 1, 1990; Acts 1991, No. 892, §1; Acts 1992, No. 767, §1; Acts 1995, No. 245, §1, eff. June 14, 1995; Acts 2004, No. 227, §1, eff. June 14, 2004; Acts 2004, No. 256, §1, eff. June 15, 2004; Acts 2004, No. 258, §1, eff. June 15, 2004; Acts 2004, No. 293, §1, eff. July 1, 2004; Acts 2005, No. 257, §1; Acts 2006, No. 453, §1, eff. June 15, 2006; Acts 2007, No. 332, §1, eff. July 9, 2007; Acts 2008, No. 220, §8, eff. June 14, 2008; Acts 2010, No. 799, §1, eff. June 30, 2010; Acts 2014, No. 811, §12, eff. June 23, 2014; Acts 2015, No. 254, §1, eff. June 29, 2015.

NOTE: Acts 1991, No. 892, §2 provided R.S. 23:1378(e) shall apply only to decisions of the second injury board issued on or after September 6, 1991.

§1379.  Annual report

The board shall make an annual report to the governor and the legislature, which shall contain a statement of the operations of the fund.

Added by Acts 1974, No. 165, §1; Acts 2006, No. 453, §1, eff. June 15, 2006.

Putting Our Clients First

Our clients always come first. Putting our clients first means we always offer free consultations, and free off-street parking, just one block off the highway in New Orleans. Putting our clients first also means we have a strict 24-hour communications policy, wherein our clients’ phone calls are always returned within 24 hours, if not sooner. That also means that our clients never have an issue getting through to their attorney, whether on the phone or in person.

A Proven Track Record of Success

We have successfully recovered millions of dollars in settlements for our clients in personal injury claims, auto accidents, and insurance claims. The reason that our opponents settle our clients’ cases for full value is because they know we prepare all our clients’ cases for trial from the start. In fact, we are known for not being afraid to take cases to trial, and thus our opponents know they are in for a fight when going against our clients.

Menu