Workers' Compensation Second Injury Fund
Velma Thomas, Program Coordinator
The Second Injury Fund (SIF) is a dedicated fund for the purpose of reimbursing compensation payments made by employers, or their insurers or adjusters, to certain injured employees.
SIF revenue is collected from each insurer, adjuster, and uninsured employer every March 1st, when they file their annual reports. Annual compensation payments for temporary partial disability, temporary total disability, permanent partial impairment, and permanent total disability are calculated for each claim. Up to 6% of each claim’s annual total is collected by the SIF administrator and deposited into the Second Injury Fund Account.
The workers’ compensation reforms passed by the State of Alaska Legislature on May 11, 2018 (SCS CSHB 79(FIN)) provided for the closure of the Second Injury Fund. The SIF will satisfy the remaining liabilities of the Second Injury Fund for claims submitted within the timeline listed below and pay its administrative costs from funds generated from assessments and earnings.
To receive reimbursement, the employer must demonstrate that:
- the employee had a qualifying pre-existing condition;
- the employee was hired or retained with full knowledge of this condition;
- a subsequent injury when combined with the pre-existing condition resulted in a condition substantially greater than the subsequent injury alone; and
- 104 weeks of compensation payments have been made.
- A claim for SIF reimbursement may not be submitted for an injury or death that occurs after Aug. 31, 2018.
- The employer or the employer’s insurance carrier must submit a claim for reimbursement and all required information for consideration before Oct. 1, 2020.
If an employer believes that a compensable injury is entitled to SIF reimbursement, the employer must file a Notice of Possible Claim Against the Second Injury Fund, Form 07-6110, as soon as practicable, but no later than 100 weeks after the employer or employer’s insurer has knowledge of the injury or death. After the notice has been filed, and 104 weeks of compensation have been paid, the employer may file a Petition to Join Second Injury Fund and Claim for Reimbursement, Form 07-6109.
If all conditions for reimbursement have been met, the SIF Administrator will direct the petitioner to submit to the Alaska Workers' Compensation Board a Stipulation of Facts in legal memorandum form to be approved without oral hearing. If there is a dispute of fact, the Board will schedule a pre-hearing upon receipt of a statement of readiness to proceed.
Once SIF reimbursement has been authorized, the employer or its insurer may receive monthly payments upon written proof of compensation paid. If the employer or insurer has paid a large single disbursement, such as Permanent Partial Impairment or in response to a settlement (Compromise and Release), reimbursement will be made in monthly installments over time. Alaska statutes prohibit lump sum reimbursements from the Second Injury Fund.