Second Injury Board Assessment Rate Increases to 6.75 Percent

The Louisiana Workforce Commission (LWC) recently announced that the Second Injury Board (SIB) assessment rate is increasing from 5.95 percent to 6.75 percent.

Troy Prevot, Executive Vice President of LCTA Workers’ Comp, commenting on the increase, said that the assessment rate in and of itself is not the issue, but rather, the continued existence of the SIB in general.

“The big problem here is that [the Second Injury Fund’s function] is an archaic instrument that is past its need. Simple math. You pay money to ask for it back? Does that make sense?” Prevot asked. “The only people that this works for are the ones getting more money back then they put in. The Fund is not statutorily protected so employers and insurance carriers can get taxed again if the Fund needs money after being swept. Most states have done away with their Second Injury Funds and let employers manage the costs.”

In the statement issued December 6th, the LWC and Office of Workers’ Compensation (OWC) say that the SIB voted for the increase at its November 2nd, 2017, meeting. The agency explains that: “This rate is an increase from 5.75 percent in 2017 due to lower than anticipated benefits reported. Specifically, $20 million less was reported from benefits paid than in previous years. As a result, the assessment rate needed to be increased to fully fund the reimbursement appropriation for next year. If the SIB assessment rate had not been increased, the direct result would have caused reimbursement on requests from stakeholders to be pushed back by several months.”

Map showing state-by-state Second Injury Fund status

For his part, Gary Kern of RiskSAVERS LLC, who frequently handles SIB claims in his work, and believes in the mission of the program, said that he would like to see more data from the SIB. “From my own data, we used to have about 23 percent of claims approved for reimbursement, and now it’s down to nine percent. I’d like to see data, like from a Legislative Auditor’s report, about how much they’re taking in versus what they pay out.”

Prevot echoed Kern on the data concerns. “The OWC was supposed to and hasn’t studied the fund to see if it meets its intended purpose, which is to encourage employment of people with preexisting medical problems,” he said. “There are federal protections in place since the Fund’s inception that prevent hiring discrimination. [The Legislature] actively removed the sunset on the Fund without studying it.”

The December 6th statement does not address those transparency concerns, but it does attempt to ensure payors understand that the reimbursement timeline for approved claims remains a focus of SIB staff. The latter part of the statement explains that “SIB’s goal of reimbursing its stakeholders within 90 days of receipt of a request cannot be met without fully funding the appropriation. In recent years, the SIB’s staff has been dedicated to achieving this goal by working to reduce the reimbursement time from two years in 2015 to one year in 2017. It has been estimated that by continuing to fully fund the appropriation, the SIB will be reimbursing within 6-8 months in November of 2018 and should be reimbursing requests at 90 days of receipt of a request by 2019.”

 

 

 

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