2006 Louisiana Laws - RS 23:1378 — Determination of liability of fund

§1378.  Determination of liability of fund

A.  An employer operating under the provisions of this Chapter who knowingly employs or knowingly retains in his employment an employee who has a permanent partial disability, as defined in Subsection F of this Section, shall be reimbursed from the Second Injury Fund as follows:

(1)(a)  For injuries occurring before July 1, 2004, and on or after July 1, 2007, if an employee who has a permanent partial disability incurs a subsequent injury arising out of and in the course of his employment resulting in liability for disability due to the merger of the subsequent injury with the preexisting permanent partial disability, the employer or, if insured, his insurer, in the first instance, shall pay all compensation provided in this Chapter, but the employer or, if insured, his insurer thereafter shall be reimbursed from the Second Injury Fund for all weekly compensation payments payable after the first one hundred four weeks of payments. Such payments shall be reimbursed provided they are submitted to the board within one year of the approval for reimbursement or within one year of the payment of such weekly compensation payments, whichever occurs later.

(b)  For injuries occurring on or after July 1, 2004, and before July 1, 2007, if an employee who has a permanent partial disability incurs a subsequent injury arising out of and in the course of his employment resulting in liability for disability due to the merger of the subsequent injury with the preexisting permanent partial disability, the employer or, if insured, his insurer thereafter shall be reimbursed from the Second Injury Fund for all weekly compensation payments payable after the first one hundred thirty weeks of payments.  Such payments shall be reimbursed provided they are submitted to the board within one year of the approval for reimbursement or within one year of the payment of such weekly compensation payments, whichever occurs later.

(2)(a)  For injuries occurring before July 1, 2004, and on or after July 1, 2007, if an employer becomes liable for the payment of death benefits under the provisions of this Chapter, said employer or, if insured, his insurer, shall be entitled to reimbursement from the workers' compensation Second Injury Fund for all death benefit payments payable after the first one hundred seventy-five weeks of payments, provided that death benefits are actually paid by said employer or his insurer under the provisions of this Chapter, and provided that the deceased employee of said employer died as a result of a combination of a preexisting permanent partial disability and a subsequent compensable injury or that said employee's death would not have occurred but for the preexisting permanent partial disability.  Such payments shall be reimbursed provided they are submitted to the board within one year of the approval for reimbursement or within one year of the payment of such death benefits, whichever occurs later.

(b)  For injuries occurring on or after July 1, 2004, and before July 1, 2007, if an employer becomes liable for the payment of death benefits under the provisions of this Chapter, said employer or, if insured, his insurer, shall be entitled to reimbursement from the workers' compensation Second Injury Fund for all death benefit payments payable after the first one hundred thirty weeks of payments, provided that death benefits are actually paid by said employer or his insurer under the provisions of this Chapter, and provided that the deceased employee of said employer died as a result of a combination of a preexisting permanent partial disability and a subsequent compensable injury or that said employee's death would not have occurred but for the preexisting permanent partial disability.  Such payments shall be reimbursed provided they are submitted to the board within one year of the approval for reimbursement or within one year of the payment of such death benefits, whichever occurs later.

(3)(a)  For injuries occurring before July 1, 2004, and on or after July 1, 2007, if an employee who has a permanent partial disability incurs a subsequent injury arising out of and in the course of his employment resulting in liability for disability due to the merger of the subsequent injury with the preexisting permanent partial disability, the employer or, if insured, the insurer, shall be reimbursed from the Second Injury Fund for medical expenses actually paid and payable in accordance with R.S. 23:1203 as follows:

(i)  Fifty percent of all reasonable and necessary medical expenses actually paid, which exceed five thousand dollars but are less than ten thousand dollars.

(ii)  One hundred percent of all reasonable and necessary medical expenses actually paid and payable, which exceed ten thousand dollars.

(iii)  Such payments shall be reimbursed provided they are submitted to the board within one year of the approval for reimbursement or within one year of the payment of such medical payments, whichever occurs later.

(b)  For injuries occurring on or after July 1, 2004, and before July 1, 2007, if an employee who has a permanent partial disability incurs a subsequent injury arising out of and in the course of his employment resulting in liability for disability due to the merger of the subsequent injury with the preexisting permanent partial disability, the employer or, if insured, the insurer, shall be reimbursed from the Second Injury Fund for medical expenses actually paid and payable in accordance with R.S. 23:1023 as follows:

(i)  One hundred percent of all reasonable and necessary medical expenses actually paid and payable, which exceed twenty-five thousand dollars.

(ii)  Such payments shall be reimbursed provided they are submitted to the board within one year of the approval for reimbursement or within one year of the payment of such medical payments, whichever occurs later.

(4)  No employer or insurer shall be entitled to reimbursement unless it is clearly established that the employer had actual knowledge of the employee's preexisting permanent partial disability prior to the subsequent injury.

(5)  The Second Injury Fund shall be credited or reimbursed for sums recovered by the employer or the insurer from third parties in an amount equal to a pro rata share of the net amount recovered based upon the amounts paid by the fund, and the amounts paid by the self-insurer or insurer which have not been reimbursed by the fund, to or on behalf of the injured employee for medical benefits, workers' compensation indemnity benefits, and vocational rehabilitation services.  The employer or the insurer shall advise the board of any subrogation action against third parties on any claim submitted to the board.  The failure of the employer or insurer to notify the board of any pending subrogation action prior to receipt of payment from the board shall subject the employer or the insurer to a penalty of twenty percent of the amount otherwise claimed by said employer or insurer as payable from the Second Injury Fund, as well as a return of all amounts paid by the board to the extent these amounts are recovered in the subrogation action.  Notwithstanding any provision of this Section, the Second Injury Fund shall not be required to reimburse vocational rehabilitation expenses.

(6)  The Second Injury Fund shall not be liable for reimbursement or be obligated to give credit for any amounts paid by an employer or carrier as attorney fees, penalties, or interest, nor for any sums paid under the Jones Act or Longshoremen and Harbor Workers Compensation Act.

(7)(a)(i)  Upon the board's approval of a claim for reimbursement, and on an annual basis thereafter, the insurer shall report to the board an estimate of the future medical and indemnity liability to the injured employee on a form promulgated by the director.  The report shall be submitted to the board each year at the same time the annual report required by R.S. 23:1291.1 is submitted to the office of workers' compensation administration.

(ii)  For injuries occurring before July 1, 2004, and on or after July 1, 2007, upon the board's approval of a claim for reimbursement, the insurer shall immediately certify to the board that the medical reserve has been reduced to no more than seven thousand five hundred dollars, and the weekly disability benefits (indemnity) reserve does not exceed one hundred four weeks of indemnity.  In the event of a death claim, the weekly benefits reserve will be no more than one hundred seventy-five weeks.  No reimbursement will be made to the insurer unless such insurer complies with the provisions of this Paragraph.  The Louisiana Insurance Guaranty Association shall be entitled to reimbursement, but only to the extent of the proportion of Second Injury Fund assessment paid by insurance companies.

(b)(i)  Upon the board's approval of a claim for reimbursement, and on an annual basis thereafter, the insurer shall report to the board an estimate of the future medical and indemnity liability to the injured employee on a form promulgated by the director.  The report shall be submitted to the board each year at the same time the annual report required by R.S. 23:1291.1 is submitted to the office of workers' compensation administration.

(ii)  For injuries occurring on or after July 1, 2004, and before July 1, 2007, upon the board's approval of a claim for reimbursement, the insurer shall immediately certify to the board that the medical reserve has been reduced to no more than twenty-five thousand dollars, and the weekly disability benefits (indemnity) reserve does not exceed one hundred thirty weeks of indemnity.  In the event of a death claim, the weekly benefits reserve will be no more than one hundred thirty weeks.  No reimbursement will be made to the insurer unless such insurer complies with the provisions of this Paragraph.  The Louisiana Insurance Guaranty Association shall be entitled to reimbursement, but only to the extent of the proportion of Second Injury Fund assessment paid by insurance companies.

(8)(a)(i)  For an accident occurring on or after October 1, 1995, the employer, if self-insured, or the insurer shall obtain written approval from the board of any lump sum or compromise settlement of an approved claim before such settlement is submitted for approval, as provided in Part III of this Chapter.

(ii)  If written approval is obtained, an order approving the settlement shall be obtained within one hundred eighty days from the date that approval is issued after which time the written approval shall be null and the self-insurer or insurer must again obtain written approval to settle the claim.  The board shall respond to requests for written approval within forty-five days of receipt of the request.

(iii)  If an employer, if self-insured, or the insurer seeks authority to enter into a compromise settlement in connection with the settlement of a third-party claim, the board shall respond within three working days unless the settlement contemplates payment by the insurer or self-insurer of additional amounts which exceed fifty thousand dollars.  If the settlement contemplates additional amounts which exceed fifty thousand dollars, the board shall respond within forty-five days of receipt of the request.

(iv)  If the board does not issue a written response within the time provided in Items (ii) and (iii), the request shall be deemed approved unless the employer or insurer does not comply with rules promulgated pursuant to Item (v) of this Paragraph.

(v)  The director of the Office of Workers' Compensation Administration shall establish and promulgate, in accordance with the Administrative Procedure Act, such rules and regulations governing the submission of requests for approval as well as response from the board as may be deemed necessary and which are not inconsistent with the laws of this state.

(b)(i)  Except in cases of a settlement in connection with the settlement of a third-party claim, if the self-insurer or insurer fails to obtain written approval from the board as provided in Subparagraph (a) of this Paragraph or fails to submit the settlement to the judge for approval as provided in Subparagraph (a) of this Paragraph, the fund shall not reimburse such self-insurer or insurer for the final settlement amount.

(ii)  In cases of a settlement in connection with the settlement of a third-party claim, if the self-insurer or insurer fails to obtain written approval from the board as provided in Subparagraph (a) of this Paragraph or fails to submit the settlement to the judge for approval as provided in Subparagraph (a) of this Paragraph, the fund shall not reimburse such self-insurer or insurer for the final settlement amount and twenty-five percent of the unpaid reimbursements due or ten thousand dollars, whichever is greater.

(iii)  As used in this Section, "final settlement amount" shall mean only additional funds contemplated to be paid by the insurer or self-insurer.

(c)  The board shall not be a party to any lump sum compromise settlement with the employee.

(d)  In the event that the board issues a written denial of the settlement, the property or casualty insurer, self-insured employer, or group self-insurance fund may appeal pursuant to Subsection E.  The appeal shall be placed on the preference docket of the appropriate district court and shall be heard on the earliest practicable date.

B.(1)  Except as provided in Paragraph (2) of this Subsection, the employer or his insurer, whichever of them makes the payments or becomes liable, shall within one year after the first payment of either compensation or medical benefits, whichever occurs first, notify the board in writing of such facts and furnish such other information as may be required by the board to determine if the employer or his insurer is qualified for reimbursement from the Workers' Compensation Second Injury Fund.  Except as provided in Paragraph (2) of this Subsection, no employer, insurer, servicing agent, or self-insured association shall be reimbursed unless the board is notified within one year from the date of the first payment of either compensation or medical benefits, whichever occurs first.  Employers which are self-insured for workers' compensation benefits, but have not received a certificate of authority from the commissioner of insurance as provided for in R.S. 23:1193* or authorization from the director pursuant to R.S. 23:1168(A)(2) or (3), shall not be entitled to reimbursement from the fund.

(2)  When the last sentence of R.S. 23:1209(A) is applicable to a claim against an employer, the employer or his insurer, whichever of them makes the payments or becomes liable, shall within one year after the first payment of either compensation or medical benefits, whichever occurs later, notify the board in writing of such facts and furnish such other information as may be required by the board to determine if the employer or his insurer is qualified for reimbursement from the Workers' Compensation Second Injury Fund.

C.  Upon receipt of a notice as provided in Subsection B hereof, the board may conduct an investigation into all phases of the matter and take any and all other actions necessary to permit it to determine whether or not the employer or his insurer is entitled to reimbursement from the Worker's Compensation Second Injury Fund.

The board may call a hearing thereon and, in such case, the employer and insurer, if any, shall be notified of the date, time, and place at least ten days before the date set for the hearing.  Hearings may be had in the parish wherein the accident occurred or in any other parish that the board determines to be more convenient.  The board shall establish rules for the conduct of such hearings.  The board may issue subpoenas for witnesses in its behalf or for witnesses deemed necessary to a proper determination of the case.  It shall issue subpoenas for witnesses at the request of the employer or insurer.  At such hearings, the board shall not make a determination which would create, provide, diminish, or affect any worker's compensation benefits due to an injured employee, but shall limit itself to the determination of whether the fund is liable to reimburse the employer, or, if insured, the insurer.

D.  If the board finds that the employer or, if insured, his insurer, is entitled to reimbursement, as provided in this part, from the worker's compensation second injury fund, the board shall issue its warrant to the state treasurer for payments to be made at such intervals as the board directs from the worker's compensation second injury fund to such employer or insurer for the amount provided in Subsection A hereof.  In the event the employer or insurer makes a compromise or a lump sum payment as provided in R.S. 23:1271 through 1274, the board shall have the discretion of paying in a lump sum or in periodic payments of three-month intervals for the amount that would have been due the employee for that period from the date the compromise or lump sum settlement agreement is received in the board's office.

E.  Written notice of the decision of the board shall be given to all parties to the hearing and the representatives designated by the party on the reimbursement form submitted to the board.  The decision of the board shall be final; however, an appeal therefrom may be taken by any of the parties within thirty days after the date of the decision of the board.  If an appeal is taken, the board shall be made party defendant, and service and citation shall be made in accordance with applicable law upon the attorney general or one of his assistants.  The appeal shall be to the Nineteenth Judicial District Court, parish of East Baton Rouge.  All appeals in all such cases shall be tried de novo.

F.  As used in this Part, permanent partial disability means any permanent condition, whether congenital or due to injury or disease, of such seriousness as to constitute a hindrance or obstacle to obtaining employment or to obtaining reemployment if the employee should become unemployed.  Where, however, the employer establishes that he had knowledge of the preexisting permanent partial disability prior to the subsequent injury, there shall be a presumption that the employer considered the condition to be permanent and to be or likely to be a hindrance or obstacle to employment where the condition is one of the following:

(1)  Epilepsy;

(2)  Diabetes;

(3)  Cardiac disease;

(4)  Arthritis;

(5)  Amputated foot, leg, arm, or hand or total loss of use thereof;

(6)  Loss of sight of one or both eyes or a partial loss of uncorrected vision of more than seventy-five percent bilaterally;

(7)  Residual disability from poliomyelitis;

(8)  Cerebral palsy;

(9)  Multiple sclerosis;

(10)  Parkinson's disease;

(11)  Cerebral vascular accident;

(12)  Tuberculosis;

(13)  Silicosis;

(14)  Psychoneurotic disability following treatment in a recognized medical or mental institution;

(15)  Hemophilia;

(16)  Chronic osteomyelitis;

(17)  Ankylosis of joints;

(18)  Hyperinsulinism;

(19)  Muscular dystrophy;

(20)  Arteriosclerosis;

(21)  Thrombophlebitis;

(22)  Varicose veins;

(23)  Heavy metal poisoning;

(24)  Ionizing radiation injury;

(25)  Compressed air sequelae;

(26)  Ruptured intervertebral disc;

(27)  Hodgkin's disease;

(28)  Brain damage;

(29)  A spinal fusion or the surgical removal of an intervertebral disc;

(30)(a)  Mental retardation, provided the diagnosis of mental retardation shall be made on the basis of:

(i)  Significantly subnormal intellectual functioning, defined as an objective measure of cognitive status which fall at least two standard deviations below the mean of the national standardization sample based on valid results of a recognized individually administered test of intellectual function.

(ii)  Objective evidence of concurrent impairment of adaptive functioning in at least two areas of functional behavior as measured by standardized, norm reference measures of adaptive function.

(iii)  Evidence of an onset before the age of 18 years.

(b)  It shall not be necessary for the employer to know the employee's actual intelligence quotient or actual relative ranking in relation to the intelligence quotient of the general population.

(c)  Diagnosis of mental retardation shall be made by a psychiatrist or psychologist.

Acts 1974, No. 165, §1; Acts 1976, No. 267, §2, eff. Oct. 1, 1977; Acts 1976, No. 298, §1; Acts 1976, No. 299, §§1, 2; Acts 1977, No. 267, §§2, 3, eff. Oct. 1, 1977; Acts 1976, No. 50, §1; Acts 1983, 1st Ex. Sess., No. 1, §§1, 6, eff. July 1, 1983; Acts 1985, No. 697, §1, eff. Oct. 1, 1985; Acts 1988, No. 938, §1, eff. July 1, 1989; Acts 1988, No. 997, §1; Acts 1989, No. 23, §1, eff. June 15, 1989; Acts 1989, No. 260, §1, eff. Jan. 1, 1990; Acts 1991, No. 892, §1; Acts 1992, No. 767, §1; Acts 1995, No. 245, §1, eff. June 14, 1995; Acts 2004, No. 227, §1, eff. June 14, 2004; Acts 2004, No. 256, §1, eff. June 15, 2004; Acts 2004, No. 258, §1, eff. June 15, 2004; Acts 2004, No. 293, §1, eff. July 1, 2004; Acts 2005, No. 257, §1; Acts 2006, No. 453, §1, eff. June 15, 2006.

*Repealed, Acts 1995, No. 703, §2.

NOTE:  Acts 1991, No. 892, §2 provided R.S. 23:1378(e) shall apply only to decisions of the second injury board issued on or after September 6, 1991.