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The Industrial Special Indemnity Fund was adopted in 1927 by Idaho’s state legislature as part of the state’s workers’ compensation system. The purpose of the Fund, commonly referred to as the “second injury fund”, is to encourage employers to hire impaired workers by offering the employer relief from total and permanent disability liability if the impaired worker is subsequently injured and becomes totally and permanently disabled.
The Industrial Special Indemnity Fund is codified as to its purpose and management at §72-323, §72-324 §72-330 §72-331 §72-334.
Funding for the Industrial Special Indemnity Fund is provided by an annual assessment. The assessment is calculated two times the amount of the Fund’s expenses incurred during the previous fiscal year less the existing cash balance. The total annual assessment is pro-rated semi-annually among the State Insurance Fund, self-insured companies, and sureties based on each entity’s proportionate share of total indemnity benefits paid on open workers’ compensation claims during each semi-annual reporting period. The Industrial Commission prepares and submits semi-annually notice to each responsible entity the amount of their pro-rata assessment share.
The assessment formula of funding replaced the levy system as of July 1, 1997 with the repeal of section §72-327 and §72-328 and the addition of new sections §72-327, §72-328.
Claimants, self-insured companies, sureties or the Idaho State Insurance Fund may access the Industrial Special Indemnity Fund for potential liability relief by submitting a claim under a “60 day” rule §72-334. During the “60” days from submission, the Fund will undertake an in-house review of the claim for liability and, if appropriate, engage in settlement or deny liability. At the conclusion of 60 days, the party filing the submission can elect to file a Complaint Against the Industrial Special Indemnity Fund (IC Form 1002). Upon service of a Complaint Against the Industrial Special Indemnity Fund, the Fund will refer the claim to outside legal counsel and commence formal litigation.
Settlement of claims may be concluded by lump sum, periodic monthly payments, or a combination with the approval of the Industrial Commission. While settlement may relieve sureties and self-insured employers of liability, benefit payments are only made to claimants. Industrial Special Indemnity Fund is liable for lifetime total and permanent disability benefits, excluding all medical benefits, if the Fund’s liability is reached §72-332. Allocation of total and permanent disability liability between the employer/surety and the Industrial Special Indemnity Fund is made under the Carey apportionment formula. Cited Carey v. Clearwater.
Benefit rates for total and permanent disability, and hence Industrial Special Indemnity Fund liability, are specified at §72-408 and §72-409. In general, total and permanent disability is based at 67%, 60% or 45% of the average state weekly wage. The minimum or maximum benefit percentage is determined by the injured worker’s average weekly wage. Benefits are paid at the determined percentage of the average state weekly wage for the year of benefit.