SUBSEQUENT INJURY FUND (SIF) History and Overview LMAC January 8, - - PowerPoint PPT Presentation

SUBSEQUENT INJURY FUND (SIF)

History and Overview LMAC – January 8, 2020

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SIF - Basics

• Backgr

ground:

• Established by the Legislature in 1973 – assists persons with disabilities become employed by offering a financial incentive to

employers to hire certified workers

• Defin

init itio ion o

• f p

person w with a a dis isabil ility: A person who has a medically certifiable permanent impairment which is a substantial obstacle to obtaining employment or ... reemployment ... considering the person's age, education, training, experience and employment rejection

• Part of a larger package of bills updating WCA
• No $ limit and lifetime medical services
• Other benefits under 39-71-701, 39-71-702 & 39-71-703
• Before SIF, employers could openly discriminate against individuals based on medical history & disability status
• Now forbidden under ADA & parallel provisions of MT Human Rights Act
• Originally paid for 1st 104 weeks of benefits – provided greater incentive to employers to hire/retain worker certified

as “industrially handicapped”. That changed in 1987 to paid after 1st 104 weeks.

• If SIF eliminated moving forward, future employers would pay for SIF liabilities already incurred - whether known or not
• Very long liability “tail”
• Pass-through assessment costs to employers
• Through surcharge if Plan 2 or 3 or assessment if Plan 1
• Natio

ional ally:

• 39 states have some type of second injury or subsequent injury fund
• 9 states no longer have their funds – AL, KS, KY, NE, NM, NY, SC, VA & WV
• 3 states never had a fund - ME, WY & OR
• 26 states enacted their funds before 1955 – Massachusetts was the last in 1986
• 30 funded through assessment or surcharge – 4 are tax on premiums

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SIF – How it Works

• Benefi

fits:

• Worker: Certified workers are more likely to be hired:
• Limit on the employer's workers' compensation liability if worker injured or reinjured on the job to 104 weeks
• IW are entitled to all benefits due under the WCA and certification applies to any new injury
• Emplo

loye yer: By hiring person certified by Department:

• Limits work comp liability
• Fund assumes all remaining liability on claim after 1st 104 weeks if worker is injured or reinjured
• Insurer: Reimbursement on claim expenses (medical and indemnity) after 104 weeks
• How I

w It W Works: s:

• Worker applies for certification with the Department
• If a subsequent injury occurs, Department notifies the insurer the injured worker is SIF certified
• After 104 weeks of making payments, insurer contacts Department to have claim certified
• Insurer submits reimbursement requests every six months to the Department
• If insurer and injured worker desire settlement, they contact the department for concurrence
• If employer is experience rated, insurer may not base that factor on those claim costs reimbursed by SIF
• SIF expenses are annually assessed to employers through insurers by:
• Plan 1 - direct assessment
• Plan 2 & 3 - surcharge on insurance bill

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$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Self-Insured Private State Fund Total Linear (Total)

SIF Payments by FY

Number of Claims

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10 20 30 40 50 60 70 80 $- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Count of Claims Amount Paid

SIF Claims by Fiscal Year - Count and Amount Paid

Paid Claims

SIF Approved Applications by FY

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50 100 150 200 250 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Approved

Approved

Working Age Eligible SIF Certified

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500 1,000 1,500 2,000 2,500 3,000 3,500 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

# Certified age 64 and under

# Certified age 64 and under

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Americans with Disabilities Act (ADA)

• Backgr

ground:

• Civil rights law - prohibits discrimination against individuals with disabilities in all areas of public life
• Became law in 1990
• Purp

rpose: T To

• ensure

re p peop

• ple w

with d h disabilities ha have t the he s same ri rights & & op

• pportunities a

as othe hers rs

• Prior to ADA, employers could ask about disabilities and SIF certification status as part of hiring process
• Prohibits discrimination in employment, public services, public accommodations & telecommunications
• What I

Is Cove vere red:

• Applies to private employers, state & local governments, employment agencies, labor organizations and labor-management

committees

• Prohibits discrimination against employees & job applicants who have physical or mental impairments that substantially limit

“majo jor l life a activ ivit itie ies” - Ex: x: caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking

• Covered disabilities: Ex: Deafness, blindness, diabetes, cancer, epilepsy, intellectual disabilities
• Employer T

Tax Credits A Ava vaila lable le: :

• Small b

businesses:

• Tax credit up to $5,000/year for providing reasonable accommodations in previous year
• Gross receipts not exceeding $1M
• No more than 30 full-time employees during preceding tax year
• Available for ½ the cost of “eligible access expenditures” <$250 but >$10,250
• Architectural or transportation barriers:
• Full tax deduction up to $15,000/year
• For removing qualified architectural or transportation barriers
• Expenses covered include: barriers created by steps, narrow doors, inaccessible parking spaces, restroom

facilities and transportation vehicles

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Has SIF outlived it’s purpose?

• Is SIF still producing a benefits to workers with disabilities and Employers as proposed

in1973

• Workers – Remove a barrier to employment
• Because of the ADA, likely no impact
• Employers – lesson potential of work comp liability by hiring SIF Certified

worker

• Pays assessment/surcharge for amount expended to replenish SIF
• Caps liability to existing population of certified workers
• Experience rating is heavily weighted to the first three years of

benefits paid. SIF doesn’t step in until after two years so this benefit is unknown

• 39-71-916 – experience rating (mod) or similar rating

technique

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Questions

Employment Relations Division Bill Wheeler, Deputy Administrator bwheeler@mt.gov 406.444.6541