Insurer Denied Second Injury Fund Reimbursement for Late Notice

An insurer that pays full workers’ compensation benefits for an insured’s injured employee who has more than one employer is entitled to be reimbursed for the share made on behalf of the other employer. However, the workers’ compensation insurer must specifically notify the New Hampshire Special Fund for Second Injuries within 100 weeks of the worker’s injury if it has a possible claim against the fund, the state Supreme Court has ruled. The high court supported the state Department of Labor in denying the claim of insurer EBIS Inc., which sought a reimbursement from the state’s special fund after it paid the full benefits on behalf of an injured worker of its insured, BAE Systems, Inc, because the BAE worker was also employed by another company. Under state law, where an employee has more than one employer, the employer and its insurer in whose employment an employee is injured is liable in the first instance for payment of all benefits. Any additional compensation due to the employee’s concurrent employment shall be reimbursed by the special fund if claimed within 100 weeks of the injury. In the case before the court, EBIS, the insurer for BAE Systems, Inc., the company where the worker was injured, did not file its claim against the fund until August 29, 2022, which was more than 100 weeks after January 7, 2020, when the employee suffered her injury. The insurer argued that the memoranda of payment it filed in 2020 and 2022 with the Department of Labor (DOL), which administers the special fund, served as notice of its possible claim against the fund, specifically because two of the memoranda contained handwritten notes saying that the employee’s average weekly wages were based upon her combined wages from BAE and another employer. At first the DOL denied the EBIS second injury claim because it found the 100 week deadline had passed. The fund concluded that the memoranda were insufficient to notify it of the insurer’s possible claim. The fund maintained that the memoranda “are only in regard to the insurance carrier’s obligations to make indemnity payments to the injured worker, without reference to claim against the Special Injury fund.” The fund coordinator explained that “there is nothing in the Memos of Payment that also notify of a potential claim against the Special Injury Fund.” EBIS appealed and the Compensation Appeals Board (CAB) reversed, finding fhat EBIS had satisfied the notice requirement with its memoranda on its payments. The CAB observed that “it should be assumed” the DOL employee who received the memoranda of payment “would know or should have known that the double memos were being submitted for purposes of such a claim even if he or she did not work directly in the Second Injury Fund department.” The CAB cited no legal or factual basis for the assumption underlying its decision, the high court noted. The DOL appealed that reversal of its denial. The high court has now agreed with the DOL that the insurer’s memoranda of payment notified the DOL only that the employee had been paid workers’ compensation benefits in accordance with the law and did not give notice that the insurer intended to make a “possible claim” against the fund. “We are not persuaded that the memoranda satisfied the statutory notice requirement. The statute places the onus on the employer or carrier to notify the Commissioner that it may have a claim against the Fund. It does not obligate the Commissioner to attempt to intuit from filings made for other purposes that the employer or carrier may seek reimbursement from the Fund,” the high court concluded. Topics Carriers