Why is the second injury fund important and what group of disadvantaged workers does it protect?
Answer:
Many states have different types of Second Injury Funds and the answer would be different depending on the state. One general type is where the state fund makes payments to the injured worker rather than the insurance company doing so. The rationale is that they were not responsible for your pre-existing condition or prior injury, so they should not have to pay for all of the resulting greater disability. Some states "apportion" the costs of your claim among several insurers who are somewhat responsible for the resulting disability.
In Massachusetts, the system requires that the last insurer who covered your job pay all of the costs of your "second injury", even though most of it is caused by, or made worse by, your pre-existing condition or prior injuries. The Second Injury Fund allows the insurer to file a petition for reimbursement only after it has made all the required payments to the injured worker. There are some very steep requirements for obtaining reimbursement, however. The Second Injury Fund is financed by an annual assessment on all the employers in the state, theoretically including the one responsible for your "first injury." This procedure allows those higher costs to be "spread out" to some degree among all the employers and everything supposedly evens out in the long run. The reason this works in MA is that the workers comp law does not "apportion" the degree of disability among the various employers who may have contributed to it. Only the "last insurer on the risk" has to deal with the injured worker.
In theory and in practice, this is easier for the injured worker who only has to fight for benefits against one insurer and doesn't get caught it the middle of a fight between several insurers while he is out of work and needing medical care. Because the single insurer may get hit harder in these situations, the SIF tries to lighten their burden after the fact and this feature should make them more likely to make a reasonable settlement with the injured worker. Remember , the ADA does not allow the employer to ask potential workers about prior accidents or impairments before they hire you, so they are forced to blindly accept what may be a greater risk than they should reasonably bear. The SIF process is, thus, a trade-off to the insurer in exchange for that ADA restriction.
Again, in theory, if all the insurers so affected get a reimbursement from the SIF, they will be more reasonable with workers with pre-existing conditions and that class of workers gets a very indirect benefit from that system.
But overall, in MA, the SIF is for the benefit of the employers and the insurance companies who pay the costs of the workers compensation system.
More Questions and Answers: