2017 South Carolina Code of Laws
Title 42 - Workers' Compensation
CHAPTER 9 - COMPENSATION AND PAYMENT
Section 42-9-400. Reimbursement from Second Injury Fund when disability substantially greater or caused by aggravation of preexisting impairment.

(a) If an employee who has a permanent physical impairment from any cause or origin incurs a subsequent disability from injury by accident arising out of and in the course of his employment, resulting in compensation and medical payments liability or either, for disability that is substantially greater and is caused by aggravation of the preexisting impairment than that which would have resulted from the subsequent injury alone, the employer or his insurance carrier shall pay all awards of compensation and medical benefits provided by this title; but such employer or his insurance carrier shall be reimbursed from the Second Injury Fund as created by Section 42-7-310 for compensation and medical benefits in the following manner:

(1) reimbursement of all compensation benefit payments payable subsequent to those payable for the first seventy-eight weeks following the injury;

(2) reimbursement of fifty percent of medical payments in excess of three thousand dollars during the first seventy-eight weeks following the injury and then reimbursement of all medical benefit payments payable subsequent to the first seventy-eight weeks following the injury; provided, however, in order to obtain reimbursement for medical expense during the first seventy-eight weeks following the subsequent injury, an employer or carrier must establish that his liability for medical payments is substantially greater by reason of the aggravation of the preexisting impairment than that which would have resulted from the subsequent injury alone.

(b) If the subsequent injury of such an employee shall result in the death of the employee, and it shall be determined that the death would not have occurred except for such preexisting permanent physical impairment, the employer or his insurance carrier shall in the first instance pay the compensation prescribed by this title; but he or his insurance carrier shall be reimbursed from the Second Injury Fund created by Section 42-7-310, for all compensation payable in excess of seventy-eight weeks.

(c) In order to qualify under this section for reimbursement from the Second Injury Fund, the employer must establish when claim is made for reimbursement thereunder, that the employer had knowledge of the permanent physical impairment at the time that the employee was hired, or at the time the employee was retained in employment after the employer acquired such knowledge. However, the employer may qualify for reimbursement hereunder upon proof that he did not have prior knowledge of the employee's preexisting physical impairment because the existence of the condition was concealed by the employee.

(d) As used in this section, "permanent physical impairment" 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.

When an employer establishes his prior knowledge of the permanent impairment, then there shall be a presumption that the condition is permanent and that a hindrance or obstacle to employment or reemployment exists when the condition is one of the following impairments:

(1) Epilepsy;

(2) Diabetes;

(3) Cardiac disease;

(4) Amputated foot, leg, arm, or hand;

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

(6) Residual disability from Poliomyelitis;

(7) Cerebral Palsy;

(8) Multiple Sclerosis;

(9) Parkinson's disease;

(10) Cerebral vascular accident;

(11) Tuberculosis;

(12) Silicosis;

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

(14) Hemophilia;

(15) Chronic Ostemyelitis;

(16) Ankylosis of joints;

(17) Hyperinsulinism;

(18) Muscular Dystrophy;

(19) Arteriosclerosis;

(20) Thrombophlebitis;

(21) Varicose veins;

(22) Heavy metal poisoning;

(23) Ionizing radiation injury;

(24) Compressed air sequelae;

(25) Ruptured intervertebral disc;

(26) Hodgkins disease;

(27) Brain damage;

(28) Deafness;

(29) Cancer;

(30) Sickle-Cell Anemia;

(31) Pulmonary disease;

(32) Intellectual disability provided the employee's intelligence quotient is such that he falls within the lowest percentile of the general population. However, 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.

(e) The Second Injury Fund shall not be bound as to any question of law or fact by reason of any compensation agreement, settlement, award, and adjudication to which it was not a party, or in relation to which it was not notified at least twenty days prior to a hearing on liability that it might be subject to liability for the injury or death.

(f) An employer or his carrier must notify the Workers' Compensation Commission and the Director of the Second Injury Fund in writing of any possible claim against the fund as soon as practicable but in no event later than after the payment of the first seventy-eight weeks of compensation. This written notice must provide the:

(1) date of accident;

(2) employee's name;

(3) employer's name and address;

(4) insurance carrier's name, address, and the National Council on Compensation Insurance code; and

(5) insurance carrier's claim number, policy number, and policy effective date. The carrier claim number is the unique identifier a carrier uses throughout the life of a claim to report that claim to the National Council on Compensation Insurance. Failure to comply with the provisions of this subsection shall bar an employer or his carrier from recovery from the fund.

(g) If the employee has a permanent physical impairment, as defined in this section and the prerequisites for reimbursement have been met, and if it can be shown that the subsequent injury most probably would not have occurred "but for" the presence of the prior impairment, then reimbursement will be granted as provided in this section even if the subsequent injury does not cause the employer's liability for compensation and medical benefits to be substantially greater than that which would have resulted from the subsequent injury alone.

(h) When a third party is deemed to be an employer for the purposes of paying workers' compensation benefits, that third party will be entitled to reimbursement from the Second Injury Fund if either he or the employer of record have met the knowledge requirements outlined in this section, as well as all other requirements.

(i) The Second Injury Fund is entitled to a credit for sums recovered by the employer or his workers' compensation carrier from third parties, after the employer or his workers' compensation carrier have been reimbursed for the monies paid out by them and not reimbursed by the fund.

(j) The Second Injury Fund can enter into compromise settlements at the discretion of the director with approval of a majority of the Workers' Compensation Commission, provided a bona fide dispute exists.

(k) Any employer operating in violation of Section 42-5-20 is not eligible for reimbursement from the South Carolina Second Injury Fund.

(l) As a prerequisite to reimbursement from the fund, the insurer shall be required to certify that the medical and indemnity reserves have been reduced to the threshold limits of reimbursement and report in accordance with the National Council on Compensation Insurance Workers' Compensation Statistical Plan.

(m) The Second Injury Fund Director must quarterly submit to the National Council on Compensation Insurance information regarding Second Injury Fund accepted claims.

(n) The National Council on Compensation Insurance must submit a report of any discrepancies pursuant to regulations established by the Department of Insurance. The Department of Insurance is directed to establish regulations concerning Second Injury Fund discrepancies.

HISTORY: 1962 Code Section 72-601; 1972 (57) 2578; 1974 (58) 2237; 1976 Act No. 560 Section 1; 1982 Act No. 314, Section 1A; 1982 Act No. 438, Section 1; 1988 Act No. 309, Section 1, eff February 24, 1988; 1990 Act No. 589, Section 1, eff June 12, 1990; 2003 Act No. 73, Section 22, eff June 25, 2003; 2007 Act No. 111, Pt II, Section 3, eff July 1, 2007, applicable to injuries that occur on or after that date.