Second Injury Fund Gets Appropriations Increase, Director Williams Talks Details

The 2015 Legislative Session was a successful one for the Louisiana Second Injury Board. In addition to the passage of Senator Peacock’s SB107, which removed the sunset provision on Second Injury Fund deductibles, thus securing the deductibles for the life of the program, the Board received a requested $10 million appropriations increase in the state budget bill, (HB1) bringing the total allocated funding to $59,290,715 – with no increases in insurer assessments.

Pauline Williams, who recently accepted a new position as Deputy Director of the Office of Workers’ Compensation Administration, but is continuing in her current role as Director of the Workers’ Compensation Second Injury Board and Manager of Finance and Audit for the OWCA until her replacement is hired, spoke with Louisiana Comp Blog about how the appropriations increase will benefit the program.

“Basically, they gave us the increase we desperately needed,” Williams said of the final measure. “It’s going to allow us to pay reimbursements much faster and help us get caught up.”

For Williams, working towards catching up on those reimbursements had been the major goal of the Legislative Session, although she expressed equal gratitude for Peacock’s bill. “I really want to thank the stakeholders in this Legislative Session for both the increase and the extension,” Williams said. “In both cases, it could have had a very negative effect if it hadn’t worked out.”

Williams explained that the Second Injury Board is still “working the numbers” but that the reimbursement payments will likely be pulled forward initially by six months, with the office’s current estimates going from an average 18 month reimbursement completion to a 12 month completion.

Pauline Williams

Pauline Williams

“Our preliminary projections are that [ongoing claims] will take two fiscal cycles,” Williams explained. “That means that we can get current within two years…for me, current is a 90 day turnaround.”

Williams also delineated how the numbers will apply, saying that the effect will be different for settled claims versus ongoing claims. For accepted settled claims, the application of the new reimbursement schedule will be less significant, but payments for ongoing claims will have a more “immediate” general effect. Once the ongoing claims are current, the focus will shift to settled claims while maintaining the ongoing claims.

Mark Tullis, Administrator at LCI Workers’ Comp, was especially relieved that the Second Injury Board will be able to speed up reimbursement payments. “We had a serious claim that was approved for Second Injury Fund reimbursement last year,” Tullis said. “The reimbursements were being paid out quarterly and at a lower than expected amount, which caused some concern from our excess carrier. Pauline Williams was very proactive in realizing that the slow reimbursement schedule was a problem and bravely went to bat for all of industry at this year’s Legislative Session. The result is a win-win for claimants, business owners, industry and excess carriers. We are very grateful that now we’ll see higher reimbursements without having an increase in our SIF assessments.”

Both the increase in funding for Louisiana’s Second Injury Fund and the extension of the program buck a national trend to the contrary. Louisiana is one of only a handful of states that still has a Second Injury Fund. Originally designed to incentivize the employment of disabled individuals, many states have done away with the Funds over concerns about added bureaucracy and a lack of concrete evidence suggesting that employers understand and take advantage of the incentive. Williams however, cited this Session’s overarching support as a reason to stay the course. “This is a valuable program and this increase is going to ensure that we can keep going strong,” she said.

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