§ 22-3-3-13 — Second injury fund; employee compensation; employer assessments; penalties

(a) As used in this section, "board" refers to
the worker's compensation board created under IC 22-3-1-1.
(b) If an employee who from any cause, had lost, or lost the use of,
one (1) hand, one (1) arm, one (1) foot, one (1) leg, or one (1) eye, and
in a subsequent industrial accident becomes permanently and totally
disabled by reason of the loss, or loss of use of, another such member
or eye, the employer shall be liable only for the compensation payable
for such second injury. However, in addition to such compensation and
after the completion of the payment therefor, the employee shall be
paid the remainder of the compensation that would be due for such
total permanent disability out of a special fund known as the second
injury fund, and created in the manner described in subsection (c).
(c) Whenever the board determines under the procedures set forth
in subsection (d) that an assessment is necessary to ensure that fund
beneficiaries, including applicants under section 4(f) of this chapter,
continue to receive compensation in a timely manner for a reasonable
prospective period, the board shall send notice not later than November
1 in any year to:
(1) all insurance carriers and other entities insuring or providing
coverage to employers who are or may be liable under this article
to pay compensation for personal injuries to or the death of their
employees under this article; and
(2) each employer carrying the employer's own risk;
stating that an assessment is necessary. Not later than January 31 of the
following year, each entity identified in subdivisions (1) and (2) shall
send to the board a statement of total paid losses and premiums (as
defined in subsection (d)(4)) paid by employers during the previous
calendar year. The board may conduct an assessment under this
subsection not more than one (1) time annually. The total amount of the
assessment may not exceed two and one-half percent (2.5%) of the total
amount of all worker's compensation paid to injured employees or their
beneficiaries under IC 22-3-2 through IC 22-3-6 for the calendar year
next preceding the due date of such payment. The board shall assess a
penalty in the amount of ten percent (10%) of the amount owed if
payment is not made under this section within thirty (30) days from the
date set by the board. If the amount to the credit of the second injury
fund on or before November 1 of any year exceeds one hundred
thirty-five percent (135%) of the previous year's disbursements, the
assessment allowed under this subsection shall not be assessed or
collected during the ensuing year. But when on or before November 1
of any year the amount to the credit of the fund is less than one hundred
thirty-five percent (135%) of the previous year's disbursements, the
payments of not more than two and one-half percent (2.5%) of the total
amount of all worker's compensation paid to injured employees or their
beneficiaries under IC 22-3-2 through IC 22-3-6 for the calendar year
next preceding that date shall be resumed and paid into the fund. The
board may not use an assessment rate greater than twenty-five
hundredths of one percent (0.25%) above the amount recommended by
the study performed before the assessment.
(d) The board shall assess all employers for the liabilities, including
administrative expenses, of the second injury fund. The assessment
also must provide for the repayment of all loans made to the second
injury fund for the purpose of paying valid claims. The following
applies to assessments under this subsection:
(1) The portion of the total amount that must be collected from
self-insured employers equals:
(A) the total amount of the assessment as determined by the
board; multiplied by
(B) the quotient of:
(i) the total paid losses on behalf of all self-insured employers
during the preceding calendar year; divided by
(ii) the total paid losses on behalf of all self-insured
employers and insured employers during the preceding
calendar year.
(2) The portion of the total amount that must be collected from
insured employers equals:
(A) the total amount of the assessment as determined by the
board; multiplied by
(B) the quotient of:
(i) the total paid losses on behalf of all insured employers
during the preceding calendar year; divided by
(ii) the total paid losses on behalf of all self-insured
employers and insured employers during the preceding
calendar year.
(3) The total amount of insured employer assessments under
subdivision (2) must be collected by the insured employers'
worker's compensation insurers. The amount of employer
assessments each insurer shall collect equals:
(A) the total amount of assessments allocated to insured
employers under subdivision (2); multiplied by
(B) the quotient of:
(i) the worker's compensation premiums paid by employers
to the carrier during the preceding calendar year; divided by
(ii) the worker's compensation premiums paid by employers
to all carriers during the preceding calendar year.
(4) For purposes of the computation made under subdivision (3),
"premium" means the direct written premium.
(5) The amount of the assessment for each self-insured employer
equals:
(A) the total amount of assessments allocated to self-insured
employers under subdivision (1); multiplied by
(B) the quotient of:
(i) the paid losses attributable to the self-insured employer
during the preceding calendar year; divided by
(ii) paid losses attributable to all self-insured employers
during the preceding calendar year.
An employer that has ceased to be a self-insurer continues to be liable
for prorated assessments based on paid losses made by the employer in
the preceding calendar year during the period that the employer was
self-insured.
(e) The board may employ a qualified employee or enter into a
contract with an actuary or another qualified firm that has experience
in calculating worker's compensation liabilities. Not later than
December 1 of each year, the actuary or other qualified firm shall
calculate the recommended funding level of the fund and inform the
board of the results of the calculation. If the amount to the credit of the
fund is less than the amount required under subsection (c), the board
may conduct an assessment under subsection (c). The board shall pay
the costs of the contract under this subsection with money in the fund.
(f) An assessment collected under subsection (c) on an employer
who is not self-insured must be assessed through a surcharge based on
the employer's premium. An assessment collected under subsection (c)
does not constitute an element of loss, but for the purpose of collection
shall be treated as a separate cost imposed upon insured employers. A
premium surcharge under this subsection must be collected at the same
time and in the same manner in which the premium for coverage is
collected, and must be shown as a separate amount on a premium
statement. A premium surcharge under this subsection must be
excluded from the definition of premium for all purposes, including the
computation of insurance producer commissions or premium taxes.
However, an insurer may cancel a worker's compensation policy for
nonpayment of the premium surcharge. A cancellation under this
subsection must be carried out under the statutes applicable to the
nonpayment of premiums.
(g) The sums shall be paid by the board to the treasurer of state, to
be deposited in a special account known as the second injury fund. The
funds are not a part of the general fund of the state. Any balance
remaining in the account at the end of any fiscal year shall not revert
to the general fund. The funds shall be used only for the payment of
fund liabilities described in subsection (d) and awards of compensation
ordered by the board and chargeable against the fund pursuant to this
section, and shall be paid for that purpose by the treasurer of state upon
award or order of the board.
(h) If an employee who is entitled to compensation under IC 22-3-2
through IC 22-3-6 either:
(1) exhausts the maximum benefits under section 22 of this
chapter without having received the full amount of award granted
to the employee under section 10 of this chapter; or
(2) exhausts the employee's benefits under section 10 of this
chapter;
then such employee may apply to the board, who may award the
employee compensation from the second injury fund established by this
section, as follows under subsection (i).
(i) An employee who has exhausted the employee's maximum
benefits under section 10 of this chapter may be awarded additional
compensation equal to sixty-six and two-thirds percent (66 2/3%) of the
employee's average weekly wage at the time of the employee's injury,
not to exceed the maximum then applicable under section 22 of this
chapter, for a period of not to exceed three (3) years upon competent
evidence sufficient to establish:
(1) that the employee is totally and permanently disabled from
causes and conditions of which there are or have been objective
conditions and symptoms proven that are not within the physical
or mental control of the employee; and
(2) that the employee is unable to support the employee in any
gainful employment, not associated with rehabilitative or
vocational therapy.
(j) The additional award may be renewed during the employee's total
and permanent disability after appropriate hearings by the board for
successive periods not to exceed three (3) years each. The provisions
of this section apply only to injuries occurring subsequent to April 1,
1950, for which awards have been or are in the future made by the
board under section 10 of this chapter. Section 16 of this chapter does
not apply to compensation awarded from the second injury fund under
this section.
(k) All insurance carriers subject to an assessment under this section
are required to provide to the board:
(1) not later than January 31 each calendar year; and
(2) not later than thirty (30) days after a change occurs;
the name, address, and electronic mail address of a representative
authorized to receive the notice of an assessment.
Formerly: Acts 1929, c.172, s.33a; Acts 1949, c.250, s.1; Acts
1957, c.298, s.2; Acts 1963, c.387, s.8; Acts 1969, c.94, s.2; Acts 1974,
P.L.108, SEC.11. As amended by Acts 1979, P.L.227, SEC.3; Acts
1980, P.L.22, SEC.14; P.L.28-1988, SEC.28; P.L.170-1991, SEC.7;
P.L.235-1999, SEC.3; P.L.202-2001, SEC.5; P.L.178-2003, SEC.9;
P.L.134-2006, SEC.5; P.L.1-2007, SEC.158; P.L.173-2007, SEC.5;
P.L.67-2010, SEC.2; P.L.168-2011, SEC.5; P.L.204-2018,
SEC.5.