The Journal of Workers Compensation recently published Second Injury Funds in Flux; Opportunities, Changes, and Questions by W. Frederick Uehlein and Mark Nevils.
Summary: In recent years, New York, South Carolina, and Georgia have enacted legislation to phase out their respective Second Injury Funds (SIFs). Over 20 SIFs have closed or “sunset,” leaving about 20 states with SIFs open to claims with new dates of injury. Of these, about 10 have enabling language that creates significant opportunities for employer savings.
While many SIFs have closed to future claims, employers should not forget that there is still, by the authors’ estimates, upwards of $40 billion dollars to recover from those funds. Employers and insurers need to be certain that processes are in place to recover those dollars effectively and efficiently. Furthermore, the clock is ticking on several funds, making it imperative that insurers and employers with exposure in those states act now to recoup any outstanding recoveries.
This article briefly reviews the history and intent of SIFs and provides an update of major changes with respect to SIFs that have recently closed or been changed by key laws. It also seeks to put the role of today’s SIFs in a more modern context. For employers, that context is an era of significant interstate and world competition.