April 16, 2010

The End of the Subsequent Injury Trust Fund – Where Do We Stand Now?

The End of the Subsequent Injury Trust Fund – Where Do We Stand Now?

by Alissa C. Atkins, Esq.

David Taylor recently retired from the Subsequent Injury Trust Fund (SITF) as the Deputy Administrator. Jim Beck is currently serving as the Deputy Administrator. Mr. Beck spent five years as a lobbyist for Nationwide Insurance, and is familiar with many of the SITF’s policies. He recently confirmed the SITF’s monthly payout requests were $17.3 million in 2008 and $16 million in 2009. When asked to assume his new position, he was told the SITF was anticipated to have arrearages of approximately 180 million, although he reports it is actually “only” approximately $153 million. Since the SITF is now statutorily capped at receiving $100 million per year with which to pay out claims there will undoubtedly be delays in payment.

The SITF also recently issued an edict wherein the Fund would not agree to proceed with settlement of claims where an MSA was required until CMS had first approved the proposed MSA (if necessary). In view of the decisions we have been receiving from CMS lately some of us have already been bifurcating settlements, settling only the indemnity portion of the claim but withholding final settlement of the medical portion until CMS reviews the proposed MSA, reserving the right not to submit the medical settlement and simply continue paying out medical expenses. Some claimants’ attorneys have expressed frustration with bifurcating settlements in this fashion. They felt claimants’ needs will not be taken into account as some attorneys would lose interest in defending their client’s interests once the indemnity portion of the claim is settled, since claimants’ attorneys cannot take a fee off a medical settlement. Of course, if an employer/insurer refused to pay compensable medical treatment, the claimant would always have the option of returning to his attorney, who could assist him or her and then request assessed attorney’s fees.

With the pending dissolution of the SITF a question arises as to how to protect both employers and employees in cases of pre-existing injury. Previously, employers were protected when hiring an employee with a prior injury because of the SITF, and employees with prior injuries likewise had some measure of protection in the ability to obtain a job. Now, there is a concern that these types of employees may not be hirable in the future, or may not remain employed. While the Americans with Disabilities Act (ADA) may protect some of these employees, the ADA only applies to employers with 25 or more employees. That group constitutes less than 20% of the employers in Georgia.

For now the SITF is scheduled to continue receiving $100 million in annual funds, but this could change in the future. We will keep you posted with further developments.

If you have questions or comments, please contact your David & Rosetti attorney at 404-446-4488 or by visiting our website at www.davidandrosetti.com. Nothing contained in this blog should be construed as legal advice or opinion on specific facts. For editorial comments or suggestions, please contact David W. Willis at (404) 446-4491 or by replying to this email.

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