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Under Control
At Last
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Business New Haven
10/19/1998
By: BNH
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After running out of control for many years, the state's infamous Second Injury Fund has finally been harnessed. For the third time this year, state Treasurer Paul J. Silvester recently cut the surcharge on premiums employers pay to the workers compensation fund for reinjured employees.
“Businesses in Connecticut should be very happy about this,” says Patty Shea, an attorney at Robinson & Cole in Hartford. As general counsel to the Insurance Association of Connecticut, Shea served on a blue-ribbon commission charged with recommending measures to limit the liability of the Second Injury Fund. At one time, Connecticut's Second Injury Fund liability was second only to New York state's.
Since 1995, the state has lowered the surcharge by 50 percent. Three years ago, employers paid an all-time high surcharge of 20 percent. That charge, or tax, is on top of the premiums employers pay for workers compensation insurance. Today, the Second Injury Fund surcharge is ten percent and is expected to go lower as more claims are settled and more employees are returned to work.
“In the past we were not managing the claims that came in,” explains Connecticut Business & Industry Association (CBIA) attorney Bonnie Stewart, who was also a member of the blue ribbon commission. “Now, things have improved tremendously and cases are being settled up front and the General Assembly has limited the types of cases that can be transferred to the Second Injury Fund.”
Effective July 1, 1999, the only cases that will be accepted by the Second Injury Fund will be instances where the employer does not carry workers compensation insurance, or where the employee has more than one job and there is a discrepancy over which employer is liable for workers compensation payments.
“No one is going to lose any benefits,” stresses CBIA's Stewart, “and we don't see the fund ever being closed completely. What the legislation does is make employers more accountable for injuries at the workplace.”
The Second Injury Fund was created in 1945 to assist disabled veterans in finding work. Over the years, as more and more claims were made on the fund, the cost of administering the fund mushroomed and hit a high of $126 million in 1995 before the General Assembly adopted reforms.
Connecticut business will save $40 million this fiscal year because of reduced payments to the fund. On June 30 this year, the fund totaled $117.6 million and is expected to drop to $78 million as fewer people collect from the fund.
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