Third Party Claims and Issues in Louisiana Workers Compensation

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Third-Party Claims and Underlying Personal Injury Claims in Louisiana Workers Compensation

Sometimes, an employee is injured while at work due to the actions of someone other than the employer or co-worker.

In such a situation, the injured employee will likely have a workers compensation claim AND a "third-party claim" against the individual (other than the employer or co-worker) who was responsible for the accident or the injury.

Many times, this "third-party claim" is, in fact, a separate personal injury claim.

And often, this separate personal injury claim is known as an "underlying personal injury claim" because this personal injury claim lies underneath the workers compensation claim.

Under Louisiana's “exclusive remedy rule,” an injured employee is not allowed to sue the employer (or co-workers) for damages such as pain and suffering; an employee may only obtain lost wage benefits and medical benefits for the employer's workers compensation insurance company.

However, an injured employee can sue third parties (individuals and companies besides the employer or its co-workers) for damages such as pain and suffering.

But both the employee, the employer, and the workers compensation insurance company may have valid claims against the third party.

Rights of the Employee against Third-Party Wrongdoers

Under Louisiana law, workers compensation is the "exclusive remedy" between the employer and the employee, meaning that an employee can generally only sue his or her employer through the Louisiana workers compensation system and rules.

However, claims by an injured employee against a third party wrongdoer whose fault brought about the employee's injury are not through the Louisiana workers compensation system and rules.

Louisiana law expressly authorizes the employee to proceed against any third party for damages even though the employee has been awarded workers compensation benefits by his or her employer for the same injury.

Nonetheless, an employer or its insurance company can be reimbursed - which will prevent double recovery by the employee -  when the employer or its insurance company intervenes in (or steps into) the employee's lawsuit against the third-party and required that the judgment be in favor of the employer or its insurance company in order to reimburse the employer or its insurance company.

In such a case of intervention by the employer or its insurance company, only the excess recovery goes to the employee; and in some instances, the employer or its insurance company's “recovery” takes the form of a credit against future compensation owed, permitting the suspension of those future payments.

And, the employer or its insurance company may institute its own suit against the third-party wrongdoer, in which case the employee can intervene in order to ensure that the employee recovers a maximum sum.

Last, if the employee institutes suit for workers compensation benefits, and it is determined that his disability was temporary only and has terminated by the time of trial, this finding is not conclusive in the employee's subsequent tort claim against a third party for damages for the same injury.

Ways in Which the Workers Compensation Insurance Company Can Recover in a Third-Party Lawsuit

Generally speaking an employer and its workers compensation insurance company can recover in the following ways in a lawsuit against a third party:

    1. A reimbursement of workers compensation benefits already paid;
    2. A credit against its future workers compensation obligations; and
    3. Judicial interest on the amounts that it recovers.

Concerning the reimbursement of workers compensation benefits that have already been paid, if the employer or its workers compensation insurance company is a party in a lawsuit against a third party, any amounts that are recovered against the third party are apportioned so that the claim of the employer or its workers compensation insurance company for reimbursement of workers compensation benefits actually paid get priority over the claim of the injured employee. 

In other words, if the recovery from the third party is only enough to cover the reimbursement of workers compensation benefits already paid, then the employer or its workers compensation insurance company will get paid while the injured employee will get nothing.

This is because Louisiana law provides the employer and its workers compensation insurance company with “first dollar” rights to and a lien upon tort recovery, which means that only after the intervenor has recovered what it is due is any excess apportioned to the plaintiff.

And, the employer and its workers compensation insurance company are entitled to reimbursement out of the total amount of damages awarded, regardless of whether those damages are calculated as weekly lost wage (indemnity) benefits paid to the employee or medical expenses paid on behalf of the employee.

In addition to reimbursement for the amounts actually paid to the employee or on his behalf up to the date of trial, the employer and its workers compensation insurance company are often entitled to a credit against the tort recovery for amounts for future workers compensation payments or medical expenses to be undertaken.

In other words, the employer and its workers compensation insurance company are entitled to reimbursement for not only those amounts already paid, but those amounts it will become obligated to pay in the future.

So if the damages awarded in a third-party lawsuit are greater than the amount of the lien of the employer or its workers compensation insurance company, the employer or its workers compensation insurance company is entitled to a credit against its future workers compensation obligation in the amount of the plaintiff's net recovery - which mean the recovery after attorney's fees and court costs are deducted - discounted at 6%.

Social Security Disability Insurance and Louisiana Workers Compensation

Social Security Disability Insurance (SSDI), also known as Social Security Disability (SSD), is insurance through the United States government in case an individual becomes disabled.

Social Security Disability Insurance (SSDI) is available for workers who have paid into the Social Security trust fund through Social Security taxes on their earnings, as well as for certain dependents of disabled workers who have paid into the Social Security trust fund.

Generally speaking, the definition of a disability is a condition where an individual is unable to engage in any substantial gainful activity because of a physical or mental impairment, where is this impairment is demonstrated by medical evidence (such as objective findings by a medical provider, symptoms, laboratory findings, and subjective complaints by the individual).

A person can qualify for Social Security Disability if he or she becomes disabled under the age of 65 or is a qualified family member of a worker who becomes disabled under age 65.

Social Security Disability payments are for disabilities that have lasted or are expected to last for at least 12 months straight or are expected to result in the death of the disabled individual.

In other words, Social Security Disability payments are intended for long-term or permanent conditions, not for temporary conditions (such as where the disabled individual is expected to quickly recover and return to full-duty work).

Once an individual qualifies for Social Security Disability, the actual disability payments will not begin until five months after the date of the onset of the disability.

However, once an individual qualifies for Social Security Disability, that individual will begin receiving health insurance through Medicare beginning 24 months after the five-month waiting period.  

The Social Security Disability "Offset"

Under Louisiana workers compensation law and United States federal Social Security law, an injured worker in Louisiana can receive both Louisiana workers compensation lost wage benefits and Social Security Disability Insurance (SSDI) benefits at the same time.

However, when an injured worker in Louisiana is receiving both Louisiana workers compensation lost wage benefits and Social Security Disability Insurance (SSDI) benefits at the same time, this injured worker in Louisiana can not receive a total combined benefit of more than 80% of the gross income that this worker was earning before he or she became disabled.   

Additionally, Social Security Disability Insurance (SSDI) benefits can NOT be reduced due to the receipt of social security old-age retirement benefits. So when an injured employee is receiving Louisiana workers compensation lost wage benefits, this employee's social security benefits may be reduced - or "offset" - so that the combined benefits do not exceed 80% of the employee's "average current wage" as calculated by the Social Security Administration (SSA).

The Social Security Administration (SSA) calculates the amount of income that the injured employee was earning before his or her disability as the injured worker's "average current wage," which is the largest amount under the following three options:

    1. The average lifetime earnings of the injured employee;
    2. The average earnings during the five years before the injured employee became disabled; and
    3. The average earnings during the one year before the injured employee became disabled.

But the maximum total amount of combined benefits that an injured worker is allowed to receive is also limited by the total amount of Social Security Disability Insurance (SSDI) benefits received by all of the members of the injured worker's family in the first month that workers compensation is received (otherwise known as the “Total Family Benefit”).

The simplified version of the method for calculating a Social Security Offset is as follows:

    1. The Social Security Administration first calculates the injured employee's average current earnings for the period before the employee became disabled;
    2. The Social Security Administration then calculates the monthly average of the injured employee's average current earnings;
    3. The Social Security Administration then determines how much the injured employee is receiving each month in workers compensation and Social Security Disability Insurance (SSDI) benefits;
    4. The Social Security Administration then determines if the combined income exceeds 80% of the average monthly earnings; and
    5. If the combined benefits do exceed 80% of the employee's average monthly earnings, then the Social Security Administration will reduce the Social Security Disability Insurance (SSDI) benefits by the amount above the 80%.

Additional requirements concerning the Social Security Disability Offset include the following:

    1. The Social Security Disability Offset is only available when the injured worker is receiving Permanent Total Disability (PTD) benefits or Permanent Partial Disability (PPD) benefits
    2. The amount of the Social Security Disability Offset can be re-calculated by the Social Security Administration every three years, which often reduces the amount of the offset;
    3. The Social Security Disability Offset is NOT available when the injured worker is receiving Supplemental Earnings Benefits (SEBs) or Temporary Total Disability (TTD) benefits;
    4. The Social Security Disability Offset is NOT available for disabilities that arose before September 8, 1978;
    5. The Social Security Disability Offset is NOT available for the receipt of social security old-age retirement benefits;
    6. The Social Security Disability Offset is NOT reduced by any amount of attorney's fees that the worker owes to his or her attorney; and  
    7. The Social Security Disability Offset can NOT reduce below the amount to which the employee's total benefits to an amount that is lower than the injured employee's weekly workers compensation rate.

So for example, let's say an injured employee had a monthly average current wage before the disability of $3,000, and the employee is set to receive $1,800 each month in workers compensation benefits and $2,200 each month in SSDI benefits.

Since eighty percent of the monthly average current wage of $3,000 equals $2,400, and the combined total of monthly workers compensation benefits and SSDI benefits equals $3,000, which exceeds the 80% average current wage by $600, the SSDI benefit would, therefore, need to be reduced (or "offset") by $600, meaning the actual monthly SSDI benefit would only be $1,600. 

The Social Security "Reverse-Offset" 

As stated above, when an injured worker in Louisiana is receiving both Louisiana workers compensation lost wage benefits and Social Security Disability Insurance (SSDI) benefits at the same time, this injured worker in Louisiana can not receive a total combined benefit of more than 80% of the gross income that this worker was earning before he or she became disabled.   

So, for this reason, when an injured employee is receiving Louisiana workers compensation lost wage benefits, this employee's social security benefits may be reduced - or "offset" - so that the combined benefits do not exceed 80% of the employee's "average current wage" as calculated by the Social Security Administration (SSA).

But, the workers compensation insurance company can request that the Louisiana workers compensation Court reverse this offset - in other words, claim a social security "reverse-offset" - if the OWC Court concludes that the injured worker is entitled to Permanently Total Disability (PTD) benefits. 

So, in all cases where benefits are converted to permanent and total disability benefits, the workers compensation insurance company is entitled to a reverse-offset, lowering what would otherwise be the workers' compensation indemnity payment.

In other words, a social security "reverse-offset" allows the workers compensation insurance company to reduce its lost wage benefits by the excess amount above the 80% of the employee's "average current wage" instead of allowing the Social Security Administration (SSA) to reduce the Social Security Disability Insurance (SSDI) benefits by that amount.

This social security "reverse-offset" exists in Louisiana workers compensation because Louisiana law has decided to give the workers compensation insurance company, rather than the federal government, the benefit of the ceiling placed on both programs by the coordination of benefits.

Settlements and Social Security "Spread" Language

A Social Security Offset can have a tremendous impact on the settlement of a workers compensation claim in Louisiana because receipt of a large lump sum settlement can potentially cause a drastic reduction of an employee's monthly SSDI benefits and might even completely eliminate these monthly SSDI benefits.

Again, this is because an injured worker in Louisiana can not receive a total combined benefit of more than 80% of the gross income that this worker was earning before he or she became disabled.    

However, fortunately, specialized "spread" language can be placed into a written settlement agreement that can minimizes or even eliminate the offset altogether.

This "spread" language can minimize or eliminate the Social Security Offset by "spreading" the monthly value of the lump sum settlement over the employee's life span through a formula approved by the Social Security Administration (SSA).

It is this average monthly benefit - the prorated monthly value of the lump sum settlement over the employee's life span - that is then used to calculate any Social Security Offset.

In other words, any potential negative impact of a Social Security Offset can be minimized or eliminated by "spreading" the value of the lump sum settlement over time.

Spread language in a written settlement agreement usually looks something like this:

    • "Of the $150,000.00 settlement, $30,000 shall be paid as attorney's fees to the attorney for the employee. The $120,000.00 to be paid to the employe, shall be calculated without commutation of interest, but shall represent the negotiated compromise Agreement that the claimant's life expectancy is 22.45 years forward from this date, pursuant to the Annuity Mortality Table for 1949 Ultimate, as established by O.C.G.A. §24-4-45, Appendix, Title 24, and that the settlement herein reached represents the payment of $110.28 per week to the claimant over the balance of the 969.44-week life expectancy of the claimant into the future."

Again, this "spread" language is used to prevent reduction or elimination of Social Security Disability (SSDI) benefits due to the Social Security Offset rule (which provides social security disability benefits will be reduced so that no combination of workers compensation benefits and social security disability benefits can exceed 80% of pre-injury earnings) by projecting the portion of lump-sum disability settlement proceeds over the worker's remaining life expectancy. 

Medicare and Louisiana Workers Compensation

Once an individual has received 24 months of Social Security Disability Insurance (SSDI) benefits, he or she automatically qualifies for Medicare. 

Medicare is a federal program that provides health coverage for certain individuals who are retired or who have become disabled.

Medicare became intertwined with Louisiana workers compensation in 1981 with the passage of the Medicare Secondary Payer Act (MSPA), which makes Medicare a “secondary payer” in place of third-party obligors (such as workers compensation insurance companies) who are considered “primary payers” under the MSPA.

Critically,  in Louisiana workers' compensation, the Medicare Secondary Payer Act (MSPA) prevents cost-shifting from the workers compensation insurance company (who is obligated to pay for medical treatment of the injured worker) to Medicare, which is good public policy since Medicare is funded by taxpayers.

In addition to the MSPA, the Center for Medicare Services (CMS) is authorized by Congress to set forth federal regulations concerning Medicare's rights with respect to workers compensation claims.

Medicare has the two following significant rights under the Medicare Secondary Payer Act (MSPA):

    1. To recover “conditional payments” from the primary payer (such as workers compensation insurance company), which means that if medical treatment is paid for by Medicare, but should be paid by the workers compensation insurance company, then Medicare has the right to recover its payments from the workers compensation insurance company; and
    2. To ensure that the primary payer (such as the workers compensation insurance company) adequately funds the employee's future medical costs in a workers compensation settlement.

So basically, the main point of the Medicare Secondary Payer Act (MSPA) is to “protect Medicare's interest,” which is important because Medicare (and thus the taxpayers) should not have to pay the medical expenses for a work-related injury that are otherwise owed by the workers compensation insurance company.

Medicare Set-Aside Arrangements (MSAs)

Medicare will not allow the injured worker simply to settle his or her workers compensation claim, pocket all the money for the future medical expenses, and then have Medicare pay for all the future medical expenses.

To avoid such a scenario, Medicare requires that the workers compensation insurance company "set-aside" a portion of that settlement money so that it can be used for future medical expenses, thereby preventing Medicare from having to pay for those future medical expenses.

This process of "setting-aside" a portion of that settlement money is known as a "Medicare Set-Aside Arrangement" or an "MSA" for short.

In Louisiana workers compensation, a Medicare Set-Aside Arrangement (MSA) is a financial agreement that allocates a portion of a workers' compensation settlement to pay for future medical services related to the workers compensation injury, illness, or disease.

These funds that are "set-aside" in an MSA must be depleted before Medicare will pay for medical treatment related to the workers compensation injury, illness, or disease.

The Center for Medicare Services (CMS), which sets forth federal regulations concerning Medicare's rights with respect to workers compensation claims, states that all parties in a workers' compensation case have “significant responsibilities” to protect Medicare's interests when resolving cases that include future medical expenses.

While there are no laws requiring that an MSA be submitted to CMS for review, the recommended method to protect Medicare's interests is an MSA.

If any party chooses to submit an MSA for review, CMS requests that the party complies with its established policies and procedures.

CMS will only review new MSA proposals when one of the following conditions is met:

    1. The claimant is a Medicare beneficiary, and the total settlement amount is greater than $25,000.00; or
    2. The claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date, and the anticipated total settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.00.

The amount of each MSA is determined on a case-by-case basis. 

When to Consider Submitting a Settlement to CMS for Review 

There are no legal requirements that any Medicare Set-Aside (MSA) must be sent to the Center for Medicare Services (CMS) for review or approval.

But if a party does choose to use the MSA review process of the Center for Medicare Services (CMS) in order to obtain approval, CMS requires compliance with CMS' established policies and procedures.

CMS reviews proposed MSA amounts in order to determine if the proposed MSA amount is sufficient to cover future medical expenses related to the workers compensation settlement, judgment, or award.

If a proposed MSA total settlement amount meets the "workload review" thresholds, the proposal can be submitted to CMS for approval.

CMS will review a proposed MSA amount when the following workload review thresholds are met:

The claimant is a Medicare beneficiary, and the total settlement amount is greater than $25,000.00; or

The claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date, and the anticipated total settlement amount for future medical expenses and disability or lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.00.

A claimant has a reasonable expectation of Medicare enrollment within 30 months if any of the following apply:

    1. The claimant has applied for Social Security Disability Benefits;
    2. The claimant has been denied Social Security Disability Benefits but anticipates appealing that decision;
    3. The claimant is in the process of appealing and/or re-filing for Social Security Disability benefits;
    4. The claimant is 62 years and six months old; or
    5. The claimant has an End-Stage Renal Disease (ESRD) condition but does not yet qualify for Medicare based upon ESRD.

The $25,000 and $250,000 thresholds are determined by considering all parts of a settlement, including indemnity benefits and attorney's fees.

If the workers compensation case settles in conjunction with a tort case, the total amount received by the claimant in the settlement of the tort case (not just the net to the claimant after fees and expenses) is also used to determine if the workload threshold is met.

Medicare's Enforcement Rights in Louisiana Workers Compensation

When a proposed MSA amount is submitted to CMS for review and the claimant obtains CMS' approval, the CMS-approved MSA amount must be appropriately exhausted before Medicare will begin to pay for care related to the beneficiary's settlement, judgment, award, or other payment.

Claimants who receive a workers' compensation settlement, judgment, or award that include an amount for future medical expenses must consider Medicare's interest concerning future medical treatment.

If Medicare's interests are not considered, CMS has a priority right of recovery against any entity that received any portion of a third-party payment either directly or indirectly—a right to recover, or take back, that payment.

Medicare may also refuse to pay for future medical expenses related to the work-related injury until the entire settlement is exhausted.

There are two main situations where Medicare may try to enforce its rights following a Louisiana workers compensation settlement:

    1. When the employee fails to comply with the rules for administering an MSA; and
    2. When the MSA itself (or the lack of an MSA) does not adequately protect the interests of Medicare.

First, when an injured employee fails to comply with the rules for administering an MSA, Medicare will likely require that the employee replace the funds in the MSA, though Medicare may also refuse to pay for related medical treatment until the employee has replaced and exhausted these funds. 

Second, if CMS does not approve a settlement, or if a settlement is not even submitted for a CMS for review, CMS has the right to go after the workers compensation insurance company and the employee for a settlement that does not adequately protect Medicare's interests.

Credits and Offsets in Louisiana Workers Compensation

Louisiana provides for the following offsets and credits against the obligation of the workers compensation insurance company to pay workers compensation benefits:

    1. Offsets for Social Security Disability Insurance (SSDI) benefits (in limited situations);
    2. Credits for unemployment benefits;
    3. Credits for disability benefits funded by an employer;
    4. Credits for workers compensation benefits already paid from the obligation to pay SEBs or PPD benefits;
    5. Offsets for certain medical expenses;
    6. Credits for voluntary payments of benefits that were not due and payable when made; and
    7. Credits for certain recoveries in third-party claims.

First, when an injured worker in Louisiana is receiving both Louisiana workers compensation lost wage benefits and Social Security Disability Insurance (SSDI) benefits at the same time, this injured worker in Louisiana can not receive a total combined benefit of more than 80% of the gross income that this worker was earning before he or she became disabled.   

Second, no workers compensation benefits (whether for total disability or SEB payments) are payable for any week in which the employee has received unemployment compensation benefits.

Third, an employee's Louisiana compensation benefits are reduced to the extent necessary to limit the employee to two-thirds of his or her average weekly wage at the time of injury, if the employee is receiving payments from benefits under disability benefit plans that are funded by the employer, or other workers compensation benefits already paid from its obligation to pay SEBs or PPD benefits

The workers compensation insurance company can also receive credits for:

    1. Medical expenses in certain situations;
    2. Voluntary payments of benefits that were not due and payable when made; and
    3. Credits for third-party claims.

Concerning medical expenses, payment of any medical bill or expense of an injured employee by any person or entity shall extinguish the claim against the workers compensation insurance company for those medical expenses, unless that other person or entity is:

    1. The employee;
    2. A relative or friend of the employee;
    3. Medicaid; or
    4. Any other state medical assistance program.

If the employee or the employee's spouse actually pays premiums for health insurance, either as direct payments or as itemized deductions from their salaries, then this offset will only apply in the same percentage, if any, that the employer of the employee or the employer of his spouse paid the health insurance premiums.

Lastly, Louisiana law does not permit the workers compensation insurance company to take any credits for retirement benefits.

Liens and Subrogation Rights in Louisiana Workers Compensation

lien is defined as a legal right that an individual or an entity has against the property of another. 

Additionally, subrogation is the legal process of allowing an individual or an entity to make a claim against another to recover benefits it has already paid.

In Louisiana workers compensation, liens and subrogation rights can work in a variety of different ways.  

Louisiana law does not limit subrogation recovery to just the employer and the workers compensation insurance company; instead, the right of subrogation is extended to all “persons” who have paid OR become obligated to pay Louisiana workers compensation benefits.

Liens in Louisiana workers compensation claims can come into play in a number of ways and need to be handled as part of the settlement process.

Both the employee and the workers compensation insurance company need to feel confident that an agreed-upon settlement is final so that all duties and obligations concerning the claim are completed; for this reason, it is important to account for any liens that are asserted, or that could be asserted, by any third parties and to come to an understanding of who will be responsible for satisfying any such lien. 

Health Care Provider Liens and Subrogation Rights

As stated above, liens in Louisiana workers compensation claims can come into play in several ways.

One common way is when a health care provider has unpaid charges for medical treatment that the medical provider rendered to the injured employee so that at the time of settlement there are outstanding medical bills.

Liens for outstanding medical bills can occur when the employee treats with a health care provider that the employer does not know about, and as such the treatment is not approved through the utilization review process.

Under Louisiana law, reimbursement from the workers compensation insurance company for such charges is limited to $750, if the treatment was not emergency care, and any remaining amount above $750.00 cannot be claimed against the employee.

Additionally, all compensable medical expenses incurred before the date of settlement shall be paid by the workers compensation insurance company unless the settlement documents explicitly state otherwise.

Thus, whether or not the $750 cap applies, it is important for the injured employee and the workers compensation insurance company to agree at the time of settlement as to who will pay any outstanding medical bills.  

Health Insurance Company Liens and Subrogation Rights

Another common way for a lien to come into play in Louisiana workers compensation is when a health insurance company pays for health care expenses that the workers compensation insurance company is liable.

In such a situation, though, the amount of reimbursement cannot exceed the amount of the workers compensation insurance company's liability for the workers compensation benefit. 

In fact, most health insurance policies exclude payment for treatment that is covered under a workers compensation policy, and the health insurance company will have a claim for reimbursement against the employee if their policy pays for such treatment.

Nonetheless, a lien will very likely arise before a workers compensation settlement when an injured employee uses his or her private health insurance to pay for medical treatment, and that lien must be handled before executing the settlement documents.

Also, Louisiana law provides a credit in favor of the employer for any medical expenses paid by another entity, which includes a health insurance company, unless the employee or employee's spouse pays the premiums for such insurance and then the credit is proportional based on payments made by the employee or spouse.

So the general rule is that the employer gets a credit for payments made by a health insurer, but if the employee has a lien letter from his own health insurance company, then deciding who will be responsible for reimbursing the health insurance company can be negotiated in the settlement. 

Medicare Liens and Subrogation Rights

Payment of workers compensation medical expenses by Medicare and Medicaid can also result in liens against a workers compensation settlement.

Medicare will want to be paid back most, if not all, of the amount it paid; little to no reduction will be provided on amounts due and owing to Medicare.

Louisiana law specifically provides that payment by Medicare, Medicaid, or other state medical assistance programs does not remove the workers compensation insurance company's obligation to pay for such medical treatment.

Additionally, federal law provides that Medicare's “conditional payments” for workers compensation benefits must be reimbursed.

Medicare conditional payment amounts should be determined before settlement negotiations; for this, most workers compensation insurance companies have contracts with organizations that can perform a conditional payment search.

The workers compensation insurance company will want to know in advance what those conditional payments might be because, generally speaking, paying Medicaid liens and Medicare conditional payments becomes the responsibility of the workers compensation insurance company at the time of settlement.

Third-Party Liens and Subrogation Rights

Under Louisiana law, the employee is entitled to proceed both by claiming workers compensation benefits from the employer and its workers compensation insurance company while at the same time filing a claim or lawsuit for damages against a third-party wrongdoer.

However, the employee will not be able to recover for the same damages twice - otherwise known as "double recovery" - because the employer and its workers compensation insurance company are entitled to "intervene" in the employee's third-party lawsuit and require that the judgment be in favor of the employer to the extent required to reimburse or indemnify the employer and its workers compensation insurance company.

In other words, the employer and its workers compensation insurance company will be reimbursed for what they have to pay in workers compensation benefits, and only the excess amount will go to the employee.

In some cases, the “recovery” of the employer and its workers compensation insurance company takes the form of a credit against future workers compensation benefits owed, which then permits the suspension of those future payments.

Also, the employer or its workers compensation insurance company may institute its own lawsuit against the third-party wrongdoer (otherwise known as the tortfeasor), in which case the employee is allowed to intervene to ensure that the employee receives the maximum amount of money that the employee may be entitled.

So, Louisiana law gives the employer and its workers compensation insurance company two methods of proceeding to enforce its substantive rights:

    1. The employer and its workers compensation insurance company can bring a separate suit against the third person, without regard to whether the employee has brought suit, or is planning to do so; and 
    2. The employer and its workers compensation insurance company can assert its rights using an incidental demand - typically known as an intervention - in the employee's suit against the same third person.

However, even though Louisiana law gives the employer and its workers compensation insurance company the right to proceed against a third person for reimbursement of the amount of compensation “actually paid” to an injured employee, the employer or its workers compensation insurance company may validly waive its right of reimbursement if it chooses to do so, and this waiver is often called a “waiver of subrogation.”

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 Louisiana Statutes for Third-Party Claims and Issues in Louisiana Workers Compensation

The primary Louisiana statutes regarding third-party claim in workers compensation are La. R.S. 23:1032, La. R.S. 23:1101, La. R.S. 23:1102, La. R.S. 23:1103, La. R.S. 23:1104, La. R.S. 23:1205, La. R.S. 23:1206, La. R.S. 23:1212, La. R.S. 23:1221, La. R.S. 23:1223, La. R.S. 23:1225, 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:

§1032.  Exclusiveness of rights and remedies; employer's liability to prosecution under other laws

A.(1)(a)  Except for intentional acts provided for in Subsection B, the rights and remedies herein granted to an employee or his dependent on account of an injury, or compensable sickness or disease for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights, remedies, and claims for damages, including but not limited to punitive or exemplary damages, unless such rights, remedies, and damages are created by a statute, whether now existing or created in the future, expressly establishing same as available to such employee, his personal representatives, dependents, or relations, as against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal, for said injury, or compensable sickness or disease.

(b)  This exclusive remedy is exclusive of all claims, including any claims that might arise against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal under any dual capacity theory or doctrine.

(2)  For purposes of this Section, the word "principal" shall be defined as any person who undertakes to execute any work which is a part of his trade, business, or occupation in which he was engaged at the time of the injury, or which he had contracted to perform and contracts with any person for the execution thereof.

B.  Nothing in this Chapter shall affect the liability of the employer, or any officer, director, stockholder, partner, or employee of such employer or principal to a fine or penalty under any other statute or the liability, civil or criminal, resulting from an intentional act.

C.  The immunity from civil liability provided by this Section shall not extend to:

(1)  Any officer, director, stockholder, partner, or employee of such employer or principal who is not engaged at the time of the injury in the normal course and scope of his employment; and

(2)  To the liability of any partner in a partnership which has been formed for the purpose of evading any of the provisions of this Section.

Amended by Acts 1976, No. 147, §1; Acts 1989, No. 454, §2, eff. Jan. 1, 1990; Acts 1995, No. 432, §1, eff. June 17, 1995.

§1101.  Employee and employer suits against third persons; effect on right to compensation

A.  When an injury or compensable sickness or disease for which compensation is payable under this Chapter has occurred under circumstances creating in some person (in this Section referred to as "third person") other than those persons against whom the said employee's rights and remedies are limited in R.S. 23:1032, a legal liability to pay damages in respect thereto, the aforesaid employee or his dependents may claim compensation under this Chapter and the payment or award of compensation hereunder shall not affect the claim or right of action of the said employee or his dependents, relations, or personal representatives against such third person, nor be regarded as establishing a measure of damages for the claim; and such employee or his dependents, relations, or personal representatives may obtain damages from or proceed at law against such third person to recover damages for the injury, or compensable sickness or disease.

B.  Any person having paid or having become obligated to pay compensation under the provisions of this Chapter may bring suit in district court against such third person to recover any amount which he has paid or becomes obligated to pay as compensation to such employee or his dependents.  The recovery allowed herein shall be identical in percentage to the recovery of the employee or his dependents against the third person, and where the recovery of the employee is decreased as a result of comparative negligence, the recovery of the person who has paid compensation or has become obligated to pay compensation shall be reduced by the same percentage.  The amount of any credit due the employer may be set in the judgment of the district court if agreed to by the parties; otherwise, it will be determined pursuant to the provisions of R.S. 23:1102(A).

C.  For purposes of this Section, "third person" shall include any party who causes injury to an employee at the time of his employment or at any time thereafter provided the employer is obligated to pay benefits under this Chapter because the injury by the third party has aggravated the employment related injury.

D.  Repealed by Acts 2005, No. 267, §2.

Acts 1976, No. 147, §2; Acts 1985, No. 931, §1; Acts 1989, No. 454, §4, eff. Jan. 1, 1990; Acts 1990, No. 973, §1; Acts 1997, No. 1354, §1, eff. July 15, 1997; Acts 2005, No. 257, §§1, 2.

§1102.  Employee or employer suits against third persons causing injury; notice of filing

A.(1)  If either the employee or his dependent or the employer or insurer brings suit against a third person as provided in R.S. 23:1101, he shall forthwith notify the other in writing of such fact and of the name of the court in which the suit is filed, and such other may intervene as party plaintiff in the suit.

(2)  Any dispute between the employer and the employee regarding the calculation of the employer's credit may be filed with the office of workers' compensation and tried before a workers' compensation judge.  However, any determination of the employer's credit shall not affect any rights granted to the employer or the employee pursuant to R.S. 23:1103(C).

B.  If a compromise with such third person is made by the employee or his dependents, the employer or insurer shall be liable to the employee or his dependents for any benefits under this Chapter which are in excess of the full amount paid by such third person, only after the employer or the insurer receives a dollar for dollar credit against the full amount paid in compromise, less attorney fees and costs paid by the employee in prosecution of the third party claim and only if written approval of such compromise is obtained from the employer or insurer by the employee or his dependent, at the time of or prior to such compromise.  Written approval of the compromise must be obtained from the employer if the employer is self-insured, either in whole or in part.  If the employee or his dependent fails to notify the employer or insurer of the suit against the third person or fails to obtain written approval of the compromise from the employer and insurer at the time of or prior to such compromise, the employee or his dependent shall forfeit the right to future compensation, including medical expenses.  Notwithstanding the failure of the employer to approve such compromise, the employee's or dependent's right to future compensation in excess of the amount recovered from the compromise shall be reserved upon payment to the employer or insurer of the total amount of compensation benefits, and medical benefits, previously paid to or on behalf of the employee, exclusive of attorney fees arising out of the compromise; except in no event shall the amount paid to the employer or insurer exceed fifty percent of the total amount recovered from the compromise.  Such reservation shall only apply after the employer or insurer receives a dollar for dollar credit against the full amount paid in compromise, less attorney fees and costs paid by the employee in prosecution of the third party claim.

C.(1)  When a suit has been filed against a third party defendant in which the employer or his insurer has intervened, if the third party defendant or his insurer fails to obtain written approval of the compromise from the employer or his insurer at the time of or prior to such compromise and the employee fails to pay to the employer or his insurer the total amount of compensation benefits and medical benefits out of the funds received as a result of the compromise, the third party defendant or his insurer shall be required to reimburse the employer or his insurer to the extent of the total amount of compensation benefits and medical benefits previously paid to or on behalf of the employee to the extent said amounts have not been previously paid to the employer or his insurer by the employee pursuant to the provisions of Subsection B of this Section.  Notwithstanding such payment, all rights of the employer or his insurer to assert the defense provided herein against the employee's claim for future compensation or medical benefits shall be reserved.

(2)  Nothing herein shall be interpreted to affect the rights of the employer or his insurer to otherwise seek reimbursement for past or future compensation benefits and medical benefits against a third party defendant or his insurer without regard to the actions of the employee on whose behalf said compensation and medical benefits were paid.

(3)  Repealed by Acts 1989, No. 454, §10, eff. Jan. 1, 1990.

Amended by Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983.  Acts 1984, No. 852, §1; Acts 1985, No. 926, §1, eff. Jan. 1, 1986; Acts 1989, No. 454, §§4, 10, eff. Jan. 1, 1990; Acts 1997, No. 1354, §1, eff. July 15, 1997; Acts 2005, No. 257, §1.

§1103. Damages; apportionment of between employer and employee in suits against third persons; compromise of claims; credit

A.(1) In the event that the employer or the employee or his dependent becomes party plaintiff in a suit against a third person, as provided in R.S. 23:1102, and damages are recovered, such damages shall be so apportioned in the judgment that the claim of the employer for the compensation actually paid shall take precedence over that of the injured employee or his dependent; and if the damages are not sufficient or are sufficient only to reimburse the employer for the compensation which he has actually paid, such damages shall be assessed solely in his favor; but if the damages are more than sufficient to so reimburse the employer, the excess shall be assessed in favor of the injured employee or his dependent, and upon payment thereof to the employee or his dependent, the liability of the employer for compensation shall cease for such part of the compensation due, computed at six percent per annum, and shall be satisfied by such payment. The employer's credit against its future compensation obligation shall be reduced by the amount of attorney fees and court costs paid by the employee in the third party suit.

(2) No compromise with such third person by either the employer or the injured employee or his dependent shall be binding upon or affect the rights of the others unless assented to by him.

(3) Any dispute between the employer and the employee regarding the calculation of the employer's credit may be filed with the office of workers' compensation and tried before a workers' compensation judge. If a third party action has been filed in a district court, such dispute shall be filed in the district court and tried before a district judge unless the parties agree otherwise. However, any determination of the employer's credit shall not affect any rights granted to the employer or the employee pursuant to R.S. 23:1103(C).

B. The claim of the employer shall be satisfied in the manner described above from the first dollar of the judgment without regard to how the damages have been itemized or classified by the judge or jury. Such first dollar satisfaction shall be paid from the entire judgment, regardless of whether the judgment includes compensation for losses other than medical expenses and lost wages.

C.(1) If either the employer or employee intervenes in the third party suit filed by the other, the intervenor shall only be responsible for a share of the reasonable legal fees and costs incurred by the attorney retained by the plaintiff, which portion shall not exceed one-third of the intervenor's recovery for prejudgment payments or prejudgment damages. The amount of the portion of attorney fees shall be determined by the district court based on the proportionate services of the attorneys which benefitted or augmented the recovery from the third party. The employee as intervenor shall not be responsible for the employer's attorney fees attributable to postjudgment damages nor will the employer as intervenor be responsible for the attorney fees attributable to the credit given to the employer under Subsection A of this Section. Costs shall include taxable court costs as well as the fees of experts retained by the plaintiff. The pro rata share of the intervenor's costs shall be based on intervenor's recovery of prejudgment payments or prejudgment damages.

(2) When recovery of damages from a third party is made without filing of a suit, the employer shall be responsible for an amount, not to exceed one-third of his recovery on pre-compromise payments, for reasonable legal fees and costs incurred by the attorney retained by the employee or his dependent in pursuit of the third party matter. The responsibility for payment of this amount shall exist only if there is written approval of the compromise by the employer, his compensation carrier, or the compensation payor.

D. An insurer shall grant its insured a dollar-for-dollar credit for any amount on any claim paid pursuant to this Chapter on the employer's behalf and recovered in the current year, less any reasonable expenses incurred in the recovery by the insurer, in an action or compromise pursuant to this Section and R.S. 23:1102. The credit shall be used by the insurer in the calculation of the loss experience modifier promulgated by and in accordance with the rules of the National Council on Compensation Insurance, to be applied in determining the annual premium paid by the employer for workers' compensation insurance under this Chapter. The group self-insurance fund shall apply the loss experience modifier authorized by R.S. 23:1196.

Amended by Acts 1958, No. 109, §1; Acts 1989, No. 454, §4, eff. Jan. 1, 1990; Acts 1997, No. 53, §1; Acts 1997, No. 59, §1; Acts 1997, No. 1354, §1, eff. July 15, 1997; Acts 2016, No. 470, §1.

§1104.  Quantification of employer fault

In a suit brought pursuant to R.S. 23:1101, the fault of persons immune from suit in tort under R.S. 23:1032 shall be assessed as a percentage of the aggregate fault of all persons causing or contributing to the employee's injury, and the fault so assessed shall not be reallocated to any other person or party.  The recovery had in such a suit by the employer or any other person having paid or having become obligated to pay compensation shall be reduced by the fault so assessed.  This reduction is in addition to but not duplicative of any reduction made pursuant to Civil Code Articles 2323, 2324, and 2324.2 and R.S. 23:1101(B).

Acts 1996, 1st Ex. Sess., No. 15, §1.

§1032.  Exclusiveness of rights and remedies; employer's liability to prosecution under other laws

A.(1)(a)  Except for intentional acts provided for in Subsection B, the rights and remedies herein granted to an employee or his dependent on account of an injury, or compensable sickness or disease for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights, remedies, and claims for damages, including but not limited to punitive or exemplary damages, unless such rights, remedies, and damages are created by a statute, whether now existing or created in the future, expressly establishing same as available to such employee, his personal representatives, dependents, or relations, as against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal, for said injury, or compensable sickness or disease.

(b)  This exclusive remedy is exclusive of all claims, including any claims that might arise against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal under any dual capacity theory or doctrine.

(2)  For purposes of this Section, the word "principal" shall be defined as any person who undertakes to execute any work which is a part of his trade, business, or occupation in which he was engaged at the time of the injury, or which he had contracted to perform and contracts with any person for the execution thereof.

B.  Nothing in this Chapter shall affect the liability of the employer, or any officer, director, stockholder, partner, or employee of such employer or principal to a fine or penalty under any other statute or the liability, civil or criminal, resulting from an intentional act.

C.  The immunity from civil liability provided by this Section shall not extend to:

(1)  Any officer, director, stockholder, partner, or employee of such employer or principal who is not engaged at the time of the injury in the normal course and scope of his employment; and

(2)  To the liability of any partner in a partnership which has been formed for the purpose of evading any of the provisions of this Section.

Amended by Acts 1976, No. 147, §1; Acts 1989, No. 454, §2, eff. Jan. 1, 1990; Acts 1995, No. 432, §1, eff. June 17, 1995.

§1205.  Claim for payments; privilege of employee; non-assignability; exemption from seizure; payment of denied medical expenses

A.  Claims or payments due under this Chapter shall have the same preference and priority for the whole thereof against the assets of the employer as is allowed by law for any unpaid wages of the laborer; and shall not be assignable, and shall be exempt from all claims of creditors and from levy or execution or attachment or garnishment, except under a judgment for alimony in favor of a wife, or an ascendant or descendant.

B.  Any company which contracts for health care benefits for an employee shall have a right of reimbursement against the entity responsible for the payment of workers' compensation benefits for such employee if the company paid health care benefits for which such entity is liable.  The amount of reimbursement shall not exceed the amount of the entity's liability for the workers' compensation benefit.  In the event the company seeks recovery for such in conjunction with a claim against any other party brought by the employee, the company may be charged with a proportionate share of the reasonable and necessary costs, including attorney fees, incurred by the employee in the advancement of his claim or suit.

C.(1)  In the event that the workers' compensation payor has denied that the employee's injury is compensable under this Chapter, then any health insurer which contracts to provide health care benefits for an employee shall be responsible for the payment of all medical benefits pursuant to the terms of the health insurer's policy.  Any health insurer which contracts to provide health care benefits for an employee who violates the provisions of this Subsection shall be liable to the employee or health care provider for reasonable attorney fees and costs related to the dispute and to the employee for any health benefits payable.

(2)  The payment of medical expenses shall be recoverable pursuant to and in accordance with Subsection B of this Section.  However, if it is determined that the worker's compensation payor was responsible for payment of medical benefits that have been paid by the health insurer, the obligation of the worker's compensation payor for such benefits shall be to reimburse the health insurer one hundred percent of the benefits it paid.  If it is determined that the worker's compensation payor was responsible for payment of benefits and its denial of responsibility is determined to be arbitrary and capricious, then the health insurer shall also be entitled to recover legal interest on any benefits it paid, calculated from the date such benefits were due.

(3)  Any claim filed against the worker's compensation carrier by the health insurer or health providers in accordance with this provision shall not be subject to timely filing requirements, nor does prescription run until such time as the workers' compensation claim reaches a resolution by final judgment or settlement.

(4)  Any claim filed by a health care provider against a health insurer pursuant to this Section shall be filed no later than one hundred eighty days after the denial by the worker's compensation payor.

Acts 1995, No. 449, §1; Acts 2004, No. 554, §1. 

§1206.  Voluntary payments; deductions from benefits

Any voluntary payment or unearned wages paid by the employer or insurer either in money or otherwise, to the employee or dependent, and accepted by the employee, which were not due and payable when made, may be deducted from the payments to be made as compensation.

Amended by Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983.

§1212.  Medical expense offset

A.  Except as provided in Subsection B, payment by any person or entity, other than a direct payment by the employee, a relative or friend of the employee, or by Medicaid or other state medical assistance programs of medical expenses that are owed under this Chapter, shall extinguish the claim against the employer or insurer for those medical expenses.  This Section shall not be regarded as a violation of R.S. 23:1163.  If the employee or the employee's spouse actually pays premiums for health insurance, either as direct payments or as itemized deductions from their salaries, then this offset will only apply in the same percentage, if any, that the employer of the employee or the employer of his spouse paid the health insurance premiums.

B.  Payments by Medicaid or other state medical assistance programs shall not extinguish these claims and any payments made by such entities shall be subject to recovery by the state against the employer or insurer.

Acts 1989, No. 454, §5, eff. Jan. 1, 1990; Acts 2001, No. 1062, §1.

§1221. Temporary total disability; permanent total disability; supplemental earnings benefits; permanent partial disability; schedule of payments

Compensation shall be paid under this Chapter in accordance with the following schedule of payments:

(1) Temporary total.

(a) For any injury producing temporary total disability of an employee to engage in any self-employment or occupation for wages, whether or not the same or a similar occupation as that in which the employee was customarily engaged when injured, and whether or not an occupation for which the employee at the time of injury was particularly fitted by reason of education, training, or experience, sixty-six and two-thirds percent of wages during the period of such disability.

(b) For purposes of Subparagraph (1)(a) of this Paragraph, compensation for temporary disability shall not be awarded if the employee is engaged in any employment or self-employment regardless of the nature or character of the employment or self-employment including but not limited to any and all odd-lot employment, sheltered employment, or employment while working in any pain.

(c) For purposes of Subparagraph (1)(a) of this Paragraph, whenever the employee is not engaged in any employment or self-employment as described in Subparagraph (1)(b) of this Paragraph, compensation for temporary total disability shall be awarded only if the employee proves by clear and convincing evidence, unaided by any presumption of disability, that the employee is physically unable to engage in any employment or self-employment, regardless of the nature or character of the employment or self-employment, including but not limited to any and all odd-lot employment, sheltered employment, or employment while working in any pain, notwithstanding the location or availability of any such employment or self-employment.

(d) An award of benefits based on temporary total disability shall cease when the physical condition of the employee has resolved itself to the point that a reasonably reliable determination of the extent of disability of the employee may be made and the employee's physical condition has improved to the point that continued, regular treatment by a physician is not required.

(2) Permanent total.

(a) For any injury producing permanent total disability of an employee to engage in any self-employment or occupation for wages, whether or not the same or a similar occupation as that in which the employee was customarily engaged when injured, and whether or not an occupation for which the employee at the time of injury was particularly fitted by reason of education, training, and experience, sixty-six and two-thirds percent of wages during the period of such disability.

(b) For purposes of Subparagraph (2)(a) of this Paragraph, compensation for permanent total disability shall not be awarded if the employee is engaged in any employment or self-employment regardless of the nature or character of the employment or self-employment including but not limited to any and all odd-lot employment, sheltered employment, or employment while working in any pain.

(c) For purposes of Subparagraph (2)(a) of this Paragraph, whenever the employee is not engaged in any employment or self-employment as described in Subparagraph (2)(b) of this Paragraph, compensation for permanent total disability shall be awarded only if the employee proves by clear and convincing evidence, unaided by any presumption of disability, that the employee is physically unable to engage in any employment or self-employment, regardless of the nature or character of the employment or self-employment, including, but not limited to, any and all odd-lot employment, sheltered employment, or employment while working in any pain, notwithstanding the location or availability of any such employment or self-employment.

(d) Notwithstanding any judgment or determination that an employee is permanently and totally disabled, if such employee subsequently has or receives any earnings, including, but not limited to, earnings from odd-lot employment, sheltered employment, or employment while working in any pain, such employee shall not receive benefits pursuant to this Paragraph but may receive benefits computed pursuant to Paragraph (3) of this Section, if applicable.

(e) The issue of permanent total disability provided herein shall not be adjudicated or determined while the employee is engaged in employment pursuant to R.S. 23:1226(G), but such employment shall not prevent adjudication or determination of the employee's right to any other benefits otherwise provided in this Chapter; however, the employee shall not by virtue of employment pursuant to R.S. 23:1226(G) be deprived of the right to determination or adjudication of permanent total disability herein at a time when he is not engaged in such employment.

(3) Supplemental earnings benefits.

(a)(i) For injury resulting in the employee's inability to earn wages equal to ninety percent or more of wages at time of injury, supplemental earnings benefits, payable monthly, equal to sixty-six and two-thirds percent of the difference between the average monthly wages at time of injury and average monthly wages earned or average monthly wages the employee is able to earn in any month thereafter in any employment or self-employment, whether or not the same or a similar occupation as that in which the employee was customarily engaged when injured and whether or not an occupation for which the employee at the time of the injury was particularly fitted by reason of education, training, and experience, such comparison to be made on a monthly basis. Average monthly wages shall be computed by multiplying his wages by fifty-two and then dividing the product by twelve.

(ii) When the employee is entitled to monthly supplemental earnings benefits pursuant to this Subsection, but is not receiving any income from employment or self-employment and the employer has not established earning capacity pursuant to R.S. 23:1226, payments of supplemental earning benefits shall be made in the manner provided for in R.S. 23:1201(A)(1).

(b) For purposes of Subparagraph (3)(a), of this Paragraph, the amount determined to be the wages the employee is able to earn in any month shall in no case be less than the sums actually received by the employee, including, but not limited to, earnings from odd-lot employment, sheltered employment, and employment while working in any pain.

(c)(i) Notwithstanding the provisions of Subparagraph (b) of this Paragraph, for purposes of Subparagraph (a) of this Paragraph, if the employee is not engaged in any employment or self-employment, as described in Subparagraph (b) of this Paragraph, or is earning wages less than the employee is able to earn, the amount determined to be the wages the employee is able to earn in any month shall in no case be less than the sum the employee would have earned in any employment or self-employment, as described in Subparagraph (b) of this Paragraph, which he was physically able to perform, and (1) which he was offered or tendered by the employer or any other employer, or (2) which is proven available to the employee in the employee's or employer's community or reasonable geographic region.

(ii) For purposes of Subsubparagraph (i) of this Subparagraph, if the employee establishes by clear and convincing evidence, unaided by any presumption of disability, that solely as a consequence of substantial pain, the employee cannot perform employment offered, tendered, or otherwise proven to be available to him, the employee shall be deemed incapable of performing such employment.

(d) The right to supplemental earnings benefits pursuant to this Paragraph shall in no event exceed a maximum of five hundred twenty weeks, but shall terminate:

(i) As of the end of any two-year period commencing after termination of temporary total disability, unless during such two-year period supplemental earnings benefits have been payable during at least thirteen consecutive weeks; or

(ii) After receipt of a maximum of five hundred twenty weeks of benefits, provided that for any week during which the employee is paid any compensation under this Paragraph, the employer shall be entitled to a reduction of one full week of compensation against the maximum number of weeks for which compensation is payable under this Paragraph; however, for any week during which the employee is paid no supplemental earnings benefits, the employer shall not be entitled to a reduction against the maximum number of weeks payable under this Paragraph; or

(iii) When the employee retires; however, the period during which supplemental earnings benefits may be payable shall not be less than one hundred four weeks.

(e)(i) The fact that an employee has suffered previous disability, impairment, or disease, or received compensation therefor, shall not preclude him from receiving benefits for a subsequent injury or preclude benefits for death resulting therefrom.

(ii) If an employee receiving supplemental earnings benefits suffers a subsequent injury causing the payment of temporary total disability, permanent total disability, or supplemental earnings benefits, the combined benefits payable shall not exceed the maximum compensation rate in effect for temporary total disability at the time of the subsequent injury. Any reduction in benefits due to such limit shall be applied first to the supplemental earnings benefits payable as a result of the prior injury.

(f) Any compensable supplemental earnings benefits loss shall be reported by the employee to the insurer or self-insured employer within thirty days after the termination of the week for which such loss is claimed. The assistant secretary shall provide by rule for the reporting of supplemental earnings benefits loss by the injured worker and for the reporting of supplemental earnings benefits and payment of supplemental earnings benefits by the employer or insurer to the office and may prescribe forms for such reporting. The office, upon request by the employer or insurer, shall provide verification through unemployment compensation records under the Louisiana Employment Security Law of any claimed supplemental earnings benefits loss and shall obtain such verification from other states, if applicable.

(g) When an injured employee has been released to return to work with or without restrictions, and the employer maintains an established written and promulgated substance abuse policy which requires employer-administered drug testing prior to employment or return to work, upon the employee's failure to meet the requirements of such employer's established policy and inability to qualify for the position for that reason, the obligation for all benefits pursuant to this Chapter, with the sole exception of the obligation to provide reasonable and necessary medical treatment, shall be terminated and the employee shall be subject to the terms and conditions established in the employer's promulgated drug testing policy and program. The provisions of this Subparagraph shall not apply to prescription medication prescribed for the employee in the dosages so prescribed by a physician.

(4) Permanent partial disability. In the following cases, compensation shall be solely for anatomical loss of use or amputation and shall be as follows:

(a) For the loss of a thumb, sixty-six and two-thirds percent of wages during fifty weeks.

(b) For the loss of a first finger, commonly called the index finger, sixty-six and two-thirds percent of wages during thirty weeks.

(c) For the loss of any other finger, or a big toe, sixty-six and two-thirds percent of wages during twenty weeks.

(d) For the loss of any toe, other than a big toe, sixty-six and two-thirds percent of wages during ten weeks.

(e) For the loss of a hand, sixty-six and two-thirds percent of wages during one hundred fifty weeks.

(f) For the loss of an arm, sixty-six and two-thirds percent of wages during two hundred weeks.

(g) For the loss of a foot, sixty-six and two-thirds percent of wages during one hundred twenty-five weeks.

(h) For the loss of a leg, sixty-six and two-thirds percent of wages during one hundred seventy-five weeks.

(i) For the loss of an eye, sixty-six and two-thirds percent of wages during one hundred weeks.

(j) Loss of both hands, or both arms, or both feet, or both legs, or both eyes, or one hand and one foot, or any of two thereof, or paraplegia, or quadriplegia shall, in the absence of conclusive proof of a substantial earning capacity, constitute permanent total disability.

(k) The loss of the first phalanx of the thumb or big toe, or two phalanges of any finger or toe, shall be considered to be equal to the loss of one-half of such member, and the compensation shall be one-half of the amount above specified.

(l) The loss of more than one phalanx of a thumb, or more than two phalanges of any finger or toe shall be considered as the loss of the entire member; provided, however, that in no case shall the amount received for more than one finger exceed the amount provided in this schedule for the loss of a hand, or the amount received for the loss of more than one toe exceed the amount provided in this schedule for the loss of a foot.

(m) Amputation between the elbow and the wrist shall be considered as equivalent to the loss of a hand and amputation between the knee and the ankle shall be equivalent to the loss of a foot.

(n) A permanent total anatomical loss of the use of a member is equivalent to the amputation of the member.

(o) In all cases involving a permanent partial anatomical loss of use or amputation of the members mentioned hereinabove, compensation shall bear such proportion to the number of weeks provided for herein for the total loss of such members as the percentage loss or impairment to such members bears to the total loss of the member, provided that in no case shall compensation for an injury to a member exceed the compensation payable for the loss of such member.

(p) In cases not falling within any of the provisions already made, where the employee is seriously and permanently disfigured or suffers a permanent hearing loss solely due to a single traumatic accident, or where the usefulness of the physical function of the respiratory system, gastrointestinal system, or genito-urinary system, as contained within the thoracic or abdominal cavities, is seriously and permanently impaired, compensation not to exceed sixty-six and two-thirds percent of wages for a period not to exceed one hundred weeks may be awarded. In cases where compensation is so awarded, when the disability is susceptible to percentage determination, compensation shall be established in the proportions set forth in Subparagraph (o) of this Paragraph. In cases where compensation is so awarded, when the disability is not susceptible to percentage determination, compensation as is reasonable shall be established in proportion to the compensation hereinabove specifically provided in the cases of specific disability.

(q) No benefits shall be awarded or payable in this Paragraph unless the percentage of the anatomical loss of use or amputation, as provided in Subparagraphs (a) through (o) of this Paragraph or the percentage of the loss of physical function as provided in Subparagraph (p) or (s) of this Paragraph is as established in the most recent edition of the American Medical Association's "Guides to the Evaluation of Permanent Impairment".

(r)(i) In all claims for inguinal hernia, it must be established by a preponderance of the evidence that the hernia resulted from injury by accident arising out of and in the course and scope of employment; that the accident was reported promptly to the employer, and that the employee was attended by a licensed physician within thirty days thereafter.

(ii) If the employee submits to treatment, including surgery, recommended by a competent physician or surgeon, the employer or insurer shall pay compensation benefits as elsewhere fixed by this Chapter.

(iii) If the employee refuses to submit to such recommended treatment, including surgery, and establishes by a preponderance of the evidence that his refusal is based upon his conscientious religious objection thereto or that such recommended treatment, including surgery, involves an unusual and serious danger to him, the employer or insurer shall pay compensation benefits as elsewhere fixed by this Chapter. In all other cases of the employee's refusal to submit to such recommended treatment, including surgery, the employer shall provide all necessary first aid and medical treatment and supply the necessary truss, support, or other mechanical appliance at a total cost not in excess of six hundred dollars. In addition, the employer shall pay compensation for a period not to exceed twenty-six weeks.

(iv) Recurrence of the hernia following surgery shall be considered as a separate hernia, and the provisions and limitations of this Subparagraph shall apply.

(s)(i) In addition to any other benefits to which an injured employee may be entitled under this Chapter, any employee suffering an injury as a result of an accident arising out of and in the course and scope of his employment shall be entitled to a sum of fifty thousand dollars, payable within one year after the date of the injury. Interest on such payment shall not commence to accrue until after it becomes payable. Such payment shall not be subject to any offset for payment of any other benefit under this Chapter. Such payment shall not be subject to a claim for attorney fees; however, attorney fees may be awarded in a claim to collect such payment pursuant to R.S. 23:1201.2.

(ii) In any claim for an injury, it must be established by clear and convincing evidence that the employee suffers an injury and that such resulted from an accident arising out of and in the course and scope of his employment. Nothing herein shall limit the right of any party to obtain a second medical opinion or, in appropriate cases, the opinion of an additional medical opinion medical examiner pursuant to R.S. 23:1123.

(iii) Only the following injuries shall be considered injuries for which benefits pursuant to this Subparagraph may be claimed:

(aa) Paraplegia or quadriplegia or the total anatomical loss of both hands, or both arms, or both feet, or both legs, or both eyes, or one hand and one foot, or any of two thereof; however, functional loss or loss of use shall not constitute anatomical loss.

(bb) Third degree burns of forty percent or more of the total body surface.

(iv) Notwithstanding the provisions of R.S. 23:1291.1 and 1377, any benefit paid pursuant to this Subparagraph shall be reported to the office separately from any other benefit paid pursuant to this Chapter and shall not be subject to assessment by the office or by the Louisiana Workers' Compensation Second Injury Board.

(v) Repealed by Acts 2006, No. 494, §1.

Amended by Acts 1996, 1st Ex. Sess., No. 31, §1, eff. May 1, 1996; Acts 1997, No. 1172, §4, eff. June 30, 1997; Acts 1999, No. 444, §1, eff. June 18, 1999; Acts 1999, No. 702, §1; Acts 1999, No. 776, §1; Acts 2001, No. 522, §1; Acts 2001, No. 1014, §1, eff. June 27, 2001; Acts 2001, No. 1070, §1; Acts 2003, No. 306, §1; Acts 2006, No. 494, §1; Acts 2012, No. 860, §1; Acts 2017, No. 381, §2, eff. June 23, 2017.

§1223.  Deductions from benefits

A.  Except as provided in R.S. 23:1221(4)(s), when compensation has been paid under R.S. 23:1221(1), (2), or (3), the number of weeks of compensation paid shall be deducted from the number of weeks of compensation allowed under R.S. 23:1221(4) or Subpart C of this Part.

B.  Except as provided in R.S. 23:1221(4)(s), when compensation has been paid under R.S. 23:1221(1), (2), or (4), the number of weeks of compensation paid shall be deducted from the number of weeks of compensation allowed under R.S. 23:1221(3) or Subpart C of this Part.

Amended by Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983; Acts 1989, No. 454, §6, eff. Jan. 1, 1990; Acts 1996, 1st Ex. Sess., No. 31, §1, eff. May 1, 1996; Acts 1999, No. 126, §1.

§1225.  Reductions when other benefits payable

A.  The benefits provided for in this Subpart for injuries producing permanent total disability shall be reduced when the person receiving benefits under this Chapter is entitled to and receiving benefits under 42 U.S.C. Chapter 7, Subchapter II, entitled Federal Old Age, Survivors, and Disability Insurance Benefits, on the basis of the wages and self-employment income of an individual entitled to and receiving benefits under 42 U.S.C. §423; provided that this reduction shall be made only to the extent that the amount of the combined federal and workers' compensation benefits would otherwise cause or result in a reduction of the benefits payable under the Federal Old-Age, Survivors, and Disability Insurance Act pursuant to 42 U.S.C. §424a, and in no event will the benefits provided in this Subpart, together with those provided under the federal law, exceed those that would have been payable had the benefits provided under the federal law been subject to reduction under 42 U.S.C. §424a.  However, there shall be no reduction in benefits provided under this Section for the cost-of-living increases granted under federal law after the date of the employee's injury.

B.  No compensation benefits shall be payable for temporary or permanent total disability or supplemental earnings benefits under this Chapter for any week in which the employee has received or is receiving unemployment compensation benefits.

C.(1)  If an employee receives remuneration from:

(a)  Benefits under the Louisiana Workers' Compensation Law.

(b)  Repealed by Acts 2003, No. 616, §1.

(c)  Benefits under disability benefit plans in the proportion funded by an employer.

(d)  Any other workers' compensation benefits, then compensation benefits under this Chapter shall be reduced, unless there is an agreement to the contrary between the employee and the employer liable for payment of the workers' compensation benefit so that the aggregate remuneration from Subparagraphs (a) through (d) of this Paragraph shall not exceed sixty-six and two-thirds percent of his average weekly wage.

(2)  Notwithstanding the provisions of Paragraph (1) of this Subsection, benefits payable for injury to an employee under this Chapter shall not be reduced by the receipt of benefits under this Chapter or any other laws for injury or death sustained by another person.

(3)  If an employee is receiving both workers' compensation benefits and disability benefits subject to a plan providing for reduction of disability benefits, the reduction of workers' compensation benefits required by Paragraph (1) of this Subsection shall be made by taking into account the full amount of employer-funded disability benefits, pursuant to plan provisions, before any reduction of disability benefits are made.

(4)  If a conflict arises between the application of the provisions of this Section and those of any other Louisiana law or contract of insurance, the provisions of this Section shall control.

D.  Repealed by Acts 2004, No. 561, §1.

Added by Acts 1978, No. 750, §1; Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983; Acts 1985, No. 926, §1, eff. Jan. 1, 1986; Acts 1989, No. 454, §§6, 10, eff. Jan. 1, 1990; Acts 1991, No. 469, §1; Acts 1993, No. 928, §2, eff. June 25, 1993; Acts 1995, No. 1284, §2; Acts 2003, No. 616, §1; Acts 2004, No. 561, §1.

§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.

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