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MEMORANDUM - July 19, 1995

Legislative Changes Regarding the Second Injury Fund


TO: Self-Insureds, Insurance Carriers, Attorneys, Unions, Medical Practitioners, Commissioners and Advisory Board Members
FROM: Jesse M. Frankl, Chairman
DATE: July 19, 1995
RE: Legislative Changes Regarding the Second Injury Fund


The legislature recently enacted legislation which affects the role of the Second Injury Fund in the workers' compensation system in several important ways. The legislation is contained in Public Act No. 95-277 (House Bill No. 6923), which was signed by Governor Rowland on June 29, 1995. The following is a summary which highlights and explains the changes which affect the transfer of claims to the Fund.1 Please note that in this summary, the term "insurer" also includes "self-insured."



The most dramatic change in the Act is Section 31-349(d) which ends the transfer of "second injuries" to the Second Injury Fund. Injuries which occur on or after July 1, 1995 may no longer be transferred. The Act does not lessen the claimant's entitlement to benefits for a second injury. Rather, the Act merely stops the transfer to the Fund of those claims, so that the insurer must remain liable for the life of the claim.



The Act contains new notice provisions which must be followed in order for an insurer to transfer a claim to the Fund. Section 31-349(b) has been amended to require the insurer to "notify the custodian of the Fund by certified mail no later than three calendar years after the date of the injury or no later than ninety days after completion of payments for the first one hundred and four weeks of disability, whichever is earlier ..."

Section 31-349(b)(2) requires that the following be included with the notification:

A. copies of all medical reports;

B. an accounting of all benefits paid;

C. copies of all findings, awards and approved voluntary agreements;

D. the estimate of the reserve value for the claim;

E. $2,000 filing fee;

F. other material as the custodian may require.

The new notice requirements apply to injuries occurring prior to July 1, 1995 which have not yet been noticed to the Fund.



Section 31-349(e) requires that all existing claims for which the insurer has provided notice to transfer to the Fund must be resubmitted. Specifically, the Act requires that prior to October 1, 1995 the insurer must send notice by certified mail that it intends to pursue transfer of the pending claim. The resubmitted notice must include the items lettered A through D which are listed in the above section. However, no notice fee is required. Unless new notices for pending claims are submitted to the Fund by October 1, 1995, the claim will be considered withdrawn.



Section 4 of the Act establishes a medical panel comprised of three physicians appointed by the Chairman of the Workers' Compensation Commission to review disputed medical issues regarding the transfer of claims to the Fund. It requires that the insurer seeking to transfer a claim to the Fund "submit all controverted issues regarding the existence of a previous disability under section 31-349" to the panel. By a majority vote, the three-member panel will file its opinion with the commissioner who has jurisdiction over the disputed claim. The Act further provides that the panel's decision is not appealable to the Compensation Review Board.



The Act amends § 31-315 to allow the parties, including the custodian of the Fund, to request the modification of a claim which has been previously transferred to the Fund when changed conditions of fact have arisen.



The Act repeals § 31-325 in its entirety. Section 31-325 had provided that an individual could file an acknowledgment of a physical defect. The repeal of § 31-325 became effective on June 29, 1995 when the Act was signed by the governor. The only acknowledgments of physical defects which will be considered by the commissioners are those which were properly filed prior to an injury which occurred before June 29, 1995.



Prior to the Act, 31-301(f) provided that during the pendency of an appeal, the Fund was responsible for payments of workers' compensation awards and medical costs. The Act now requires the employer or its insurer to make these payments. Section 31-301(g) permits the employer or insurer to obtain reimbursement for such payments, plus interest, where the award of compensation is subsequently overturned.



I hope that this summary has been helpful to you in highlighting the legislative changes regarding transfers to the Second Injury Fund.


1 Because this is only a summary, and because there is as yet no case law which interprets the legislation, you should not draw a conclusion about the effect of the legislation on a particular set of facts without first reading the pertinent language in the Act or obtaining legal counsel. BACK TO TEXT