Second Injury Fund

Many states across the US have created second injury funds to reduce an employers’ exposure should an already injured worker suffer another disability, and New Hampshire is no exception. In New Hampshire, RSA 281-A:55 creates a “Special Fund for Second Injuries.” The trend nationally is to eliminate or restrict these funds, but the SIF is still fully functioning in New Hampshire. The “SIF” or “Fund” allows an employer to recover specific costs spent for an injured worker when that worker has a previously documented pre-existing permanent physical or mental condition.

The purpose of the law is to provide an incentive for employers to hire or retain injured workers. “The intent of the Second Injury Fund is to equalize the compensation costs that the employer and his insurance company must pay for impaired and non-impaired workers alike, thereby removing a potential barrier to the employment of impaired workers.” If not provided with this incentive, an employer might terminate an injured worker, fearing increased liability for a claim given the workers’ current disability.

In New Hampshire, the SIF requires that an employer have written information about an injured worker’s previous condition prior to the subsequent disability. Ideally this information will clearly identify the employer, employee, and the date it was created. The previous condition does not have to be the result of a work-related incident.

While the title of the statute suggests that the injured worker must suffer a second injury, the actual language of the statute requires only a “subsequent disability by injury.” The New Hampshire Supreme Court has ruled that an employer may recover for an injured worker’s subsequent disability without a specific second injury. In practice, this means that an insurer can receive reimbursement for a second period of disability from the primary injury when that injury is documented as required above.

There are, however, statutes of limitations (or time limits) with which a carrier must comply in order to be eligible to receive reimbursements on an SIF claim. The SIF requires initial notice of a potential claim within 100 weeks from the “injury or death”. In addition, there are subsequent annual filling deadlines. For an accepted claim, an employer may be reimbursed for up to 100% of compensation costs after an initial “deductible” of $10,000 and a period of partial reimbursement that may last for two years.

The Second Injury Fund serves a clear purpose and benefits both employers and employees in the workers compensation system. Should your business or insured have an injured worker with a pre-existing physical or mental condition, it may be worthwhile to explore recovery through the Second Injury Fund.