Pre-existing conditions and second injuries
Over the weekend, one of our regular readers left a comment in another post asking for information about work injuries that are aggravated by a pre-existing condition. At one time, most state laws had Second or Subsequent Injury Funds (SIFs) that offered some measure of recovery to employers/insurers for injuries that were exacerbated by a pre-existing condition, whether that condition was due to a work-related injury or some other prior illness or condition. In workers comp, an employer's premium rates are based on past loss experience. A second injury can often result in a very expensive claim, so the inclination would be to avoid taking any chances by hiring someone with a pre-existing condition. The purpose of SIFs is to prevent discrimination of disabled employees in hiring. SIFs provide a measure of financial relief for employers, either by reimbursing insurers/employers directly, or by taking over benefit payments for the injured worker.
Since the 1990 enactment of the Americans with Disabilities Act (ADA), many feel these funds have outlived their purpose since the ADA affords job applicants protection from discrimination on the basis of health or disability issues. Because of this, many states have eliminated funds in recent years, but funds are still operational in about 20 states - check with your insurer, your agent, or your state workers comp authority to find out if your state has such a fund.
The way that funds operate varies from state to state. In most states that still have funds, an employer must be able to demonstrate that they knew about the pre-existing injury or condition prior to the second injury. That's the tricky part. ADA prohibits an employer from exploring past medical history in the hiring process, so any knowledge about pre-existing conditions must be gained after an employment offer and before a work injury. Sometimes, this can be done in post-hire medical exams or through conditional job offers contingent on medical exams, but this is another tricky area. The law firm of Wildman Harald offers an employer guidelines for complying with the ADA in the hiring process.
For more information, Mark Nevils of Insurance Recovery Group has an excellent primer on Second Injury Funds (pdf) that's worth a read for more details. And California employers take note - he also has an article on the new amendment to the California Workers Compensation Law (SB 899) dealing with apportionment of permanent disabilities (pdf). This amendment offers some loss mitigation opportunities for employers in the event of pre-existing conditions.