The initial purpose of the "second injury" fund, which relates
to Worker's Compensation claims, was to encourage employers to hire
employees with disabilities. Why? Because such employees, especially disabled
veterans, are often rejected because their pre-existing conditions increase
the risk of future medical and cash benefits payments – benefits
that employers usually want to avoid. So, what is the second injury fund, exactly?
Common Use of the Second Injury Fund
The Second Injury Fund is a specific fund dedicated to reimbursing
Worker's Compensation payments made by employers to a certain category of injured employees.
The Second Injury Fund is most commonly used when an employee receives
a lump sum settlement due to an additional disability resulting from a
work-related injury, which is combined with a pre-existing disabling condition.
In order for the Second Injury Fund to pay benefits in this situation,
both the primary injury and the pre-existing injury must meet certain
minimum threshold requirements.
The History of the Second Injury Fund
These Second Injury Funds were once recognized in nearly every state. Beginning
back in the early 1900s, and then expanded after World War II, these supplemental
workers’ compensation funds were used to pay the portion of claims
caused by pre-existing conditions. However, now these funds are challenged
by critics as having fiscal and bureaucratic problems, and as unnecessarily
overlapping with the Americans with Disabilities Act (ADA).
Alabama No Longer Recognizes the Second Injury Fund
The criticisms of the Second Injury Fund concept have led to the elimination
of these funds in many states, according to the American Insurance Association
(AIA). Beginning in 1992, nineteen states along with the District of Columbia
have passed legislation that abolished second-injury funds, including
Alabama, Colorado, Connecticut, F lorida, Georgia, Kansas, Kentucky, Maine,
Minnesota, Nebraska, New Mexico, Rhode Island, South Dakota, Utah, Vermont,
West Virginia and, most recently, in 2007, Arkansas, New York and South Carolina.
If you have questions regarding a Worker's Compensation matter,
contact us online or by calling the Law Office of Cody R. Wix, LLC at (205) 381-4787.