Most states require employers to offer employees some form of Workersâ€™ Compensation insurance for job-related injuries and occupational diseases. The Workerâ€™s Compensation claim usually becomes the employeeâ€™s sole remedy against the employer for the injury or disease. In other words, an employee who is injured that has Workersâ€™ Compensation coverage may not also sue the employer for damages.
Earlier this century, complications arose in the Workersâ€™ Compensation system when an employee (who was covered by Workersâ€™ Compensation insurance) was injured with one employer, and then subsequently, suffered a related injury with a different employer. More specifically, there was a problem when the second injury was caused by the injury which occurred with the previous employer.
In such circumstances, either the employer or the employee would be penalized. The employee would be penalized by having benefits limited to the disability related to the second injury, or the employer would be penalized by having to pay for the resulting combined and greater disability.
For example, an employee working for employer â€śAâ€ť suffers an injury and totally loses sight in one eye. While working for employer â€śAâ€ť the injured employee is compensated through the employerâ€™s Workersâ€™ Compensation insurance carrier. Then, after rehabilitation, the employee begins work for employer â€śBâ€ť and is again injured, losing sight in the other eye. For this second injury, the employee can either be compensated for the loss of sight in one eye or for the total disability, for now he is blind.
Second Injury Fund
A solution, first adopted by New York in 1916, is the â€śSecond Injury Fundâ€ť (Fund). In short, the Fund allows employers to limit the potentially excessive Workersâ€™ Compensation costs they might otherwise have to pay when an employee with a preexisting injury (from a previous employment) suffers a new, compensable injury on the job. The intended result is usually that the Fund will pay the extra costs that might have been borne by the employer.
Although such Funds are purely creations of state law and vary in significant aspects, virtually all states now have some version of the Fund.
Criteria for Reimbursement Eligibility
As noted, the eligibility requirements vary by state, but common requirements include:
The Second Injury Fund and the Americans With Disabilities Act
The Americans with Disabilities Act (ADA) prohibits employers from discriminating against disabled prospective employees in the hiring process. When a â€śfundâ€ť is available, employers may hire employees with preexisting disabilities â€”in compliance with the ADAâ€” without fear that the preexisting injuries will result in additional injuries for which the employer may be required to provide compensation.
Since the ADA prohibits requiring physicals or asking health-related questions prior to hiring, post-hiring screenings should be considered (if acceptable in the employerâ€™s jurisdiction). In any event, an attorney should be consulted to ensure proper compliance and eligibility under the applicable state fund.