Second Injury Fund (SIF)
The Second Injury Fund (SIF) is a dedicated fund designed to reimburse employers, their insurers, or adjusters for compensation payments made to specific injured employees.
SIF Revenue Collection
SIF revenue is obtained annually from insurers, adjusters, and uninsured employers on March 1st, coinciding with their annual reports. The SIF administrator collects up to 6% of the annual total for each claim, covering temporary partial disability, temporary total disability, permanent partial impairment, and permanent total disability, depositing it into the Second Injury Fund Account
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Legislative Changes and Closure
Alaska’s State Legislature, through workers’ compensation reforms passed on May 11, 2018 (SCS CSHB 79(FIN)), mandated the closure of the Second Injury Fund. The SIF will address outstanding liabilities for claims within the specified timeline and cover administrative costs using funds generated from assessments and earnings.
Reimbursement Criteria
For reimbursement eligibility, the employer must prove that:
- The employee had a qualifying pre-existing condition.
- The employer hired or retained the employee with full knowledge of this condition.
- A subsequent injury, when combined with the pre-existing condition, resulted in a substantially greater condition than the subsequent injury alone.
- 104 weeks of compensation payments have been made.
Claim Submission and Deadline
Claims for SIF reimbursement cannot be submitted for injuries or deaths occurring after Aug. 31, 2018. Employers or their insurance carriers must file a claim for reimbursement, along with all required information, for consideration before Oct. 1, 2020.
Filing Procedures
When an employer believes a compensable injury is entitled to SIF reimbursement, they must file a Notice of Possible Claim Against the Second Injury Fund (Form 07-6110) within 100 weeks of the employer or insurer gaining knowledge of the injury or death. After filing this notice and upon completion of 104 weeks of compensation payments, the employer can submit a Petition to Join Second Injury Fund and Claim for Reimbursement (Form 07-6109).
Reimbursement Process
Upon meeting all reimbursement conditions, the SIF Administrator will guide the petitioner to submit a Stipulation of Facts in legal memorandum form to the Alaska Workers’ Compensation Board for approval without an oral hearing. In case of a factual dispute, the Board schedules a pre-hearing upon receiving a readiness statement to proceed.
Payment Structure
Once SIF reimbursement is authorized, the employer or its insurer may receive monthly payments upon providing written proof of compensation paid. If a significant single disbursement has been made, reimbursement occurs in monthly installments over time, adhering to Alaska statutes prohibiting lump sum reimbursements from the Second Injury Fund.
